Updated from 4:12 p.m. EDT

Disney ( DIS) keeps focusing on the big picture.

The owner of the ABC television network and the Disney theme parks posted solid earnings after the close Thursday, but remained cautious about the prospects for an economic bounceback that would lift the struggling company's fortunes.

Thus Thursday's postclose earnings conference call failed to change Wall Street's lukewarm feelings about Disney's outlook. The company's results have met reduced expectations, which is likely to keep the stock moving along with the market for now. But executives haven't given investors much reason to hope for a breakout in the near future.

At one point Disney honchos on the call declined to update 2003 financial guidance, noting only that they had expected a more robust recovery than they've seen. Still, the company expressed optimism that it will see a rebound at some point. Ahead of the postclose report, Disney shares rose 2 cents to $18.68.

Target Shooting

For its second quarter ended March 31, the Burbank, Calif., media conglomerate posted a profit of $229 million, or 11 cents a share, in line with Wall Street estimates and down from the year-ago $259 million, or 13 cents. Revenue rose to $6.3 billion from $5.9 billion a year earlier, beating the $6.2 billion Thomson First Call consensus estimate.

Disney said the war in Iraq had hurt its stumbling ABC unit. "The Company estimates that the total operating income impact of the war coverage in the quarter was approximately $32 million, resulting from increased costs from the coverage and the loss of advertising revenue as a result of preemptions of regular programming," Disney said. "The war coverage has extended into the Company's third fiscal quarter and the cost for that coverage is estimated at an additional $15 to $20 million."

In the parks and resorts unit, revenue slipped to $1.5 billion and segment operating income plunged to $155 million from $280 million a year ago. The company said the setback primarily reflected lower theme park attendance and hotel occupancy at the Walt Disney World Resort and higher costs at both Walt Disney World and the Disneyland Resort.

"The military conflict in Iraq and fear of terrorism have clearly had a near-term impact on a number of our businesses," CEO Michael Eisner said. "At the same time, we are pleased with the strong creative and financial success at the Studio and the positive reception of our new product offerings at Disney's California Adventure. As long as we continue to provide great entertainment and manage our businesses well, Disney will prosper over the long run."

Empty Chairs, Empty Tables

The mood for Thursday's call was set more than a month ago, when Chief Financial Officer Tom Staggs told the empty chairs at the company's snowed-in annual meeting that the ailing economy and the weak travel industry would translate into "more moderate growth" than Disney had previously forecast.

Those comments were enough to persuade analysts to give up any faith they might have had in the company's prediction of 25% to 35% earnings growth in the fiscal year ending Sept. 30. And little has made Wall Street more optimistic since then, with the fear of SARS supplanting the scourge of war.

Disney shares have risen since Staggs' remark, tracking a modest uptrend in the broader market. Still, the few who may have hoped to hear untrammeled good news coming out of Thursday's call were most likely disappointed.

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