Happy Ending: Disney Rebounds with 2 Hits

Disney of course hopes the hits will continue: later this year, the company will re-release as a double bill the first and second installments of the popular Toy Story series and, in the 2010, a Tim Burton-Johnny Depp production, Alice in Wonderland (with Depp as the Mad Hatter, obviously), as well as a third Toy Story picture.

The results must come as a relief to studio chieftains at Disney, who had gone into full cost-containment mode after a string of disappointing fare, even as budgets had grown bloviated. Among the flops were Bedtime Stories, Confessions of a Shopaholic and Jonas Brothers: The 3D Concert Experience. Disney CEO Robert Iger, talking to analysts and investors on its first-quarter earnings call the first week of May, had vowed to "address costs at every level" inside the company's film operations.

And when a company announces that, it's time to hoard the toilet paper.

In the first quarter, Disney's studio operations posted a profit of just $13 million, 97% lower than the year-ago period, when, to be fair, several big-grossers (including one in the Hannah Montana franchise of tween blockbusters) made comparisons tougher than they otherwise would have been.

But it had been the second-straight period of disappointing movie slates for Disney. A quarter earlier, the studio's operating income had fallen 64% from a year ago. As at all movie-production companies, weakening DVD sales amid competition from digital downloads has also hurt the company's results.

Disney will report its fiscal third-quarter results on July 30.