Disney's Extreme Makeover

With a tumultuous 2004 fading away in the rear-view mirror Disney (NYSE:DIS) kicked off fiscal 2005 in fine fashion, earning $0.35 a share on the strength of its theme parks, ESPN, and the continuing renaissance at ABC.

Earnings would have come in at just $0.33 a share if it weren't for a favorable charge relating to its sale of Disney Stores to The Children's Place (NASDAQ:PLCE) and an extra day in the 2005 fiscal quarter -- essentially flat with last year's showing. But the point is that Wall Street figured Mickey Mouse was going to take a dive. The 17 analysts reading tea leaves had pegged Disney to earn as little as $0.25 a share, with no one perched above the $0.33 mark.

So what happened? The one thing that Wall Street did get right was assuming that the company's studio division was going to have a rough period stacked up against last year's period, which benefited from the home video and DVD releases of Pirates of the Caribbean, The Lion King: Platinum, and Pixar's (NASDAQ:PIXR) Finding Nemo. Sales and operating profits fell there.

The same double negative occurred in the company's consumer products segment, with Disney Stores being run by new hands over the typically lucrative holiday selling season -- though Disney passing on its namesake stores did help improve the subsidiary's margins.

So it was the company's theme parks and media networks that proved to be the worthy workhorses, as has been the case since ABC started percolating after a surprisingly strong fall lineup. In sum, Disney's setting itself up for a spectacular year with ad rates no doubt inching higher at the magnetic ABC, while Disneyland's 50th anniversary chain-wide celebration promises to be just the ticket for speedier turnstile clicks.

While the company's major network rivals General Electric (NYSE:GE) and Viacom (NYSE:VIA) also have movie studios and theme parks to go along with the broadcasting properties within their entertainment empires, it's really only Disney that can make all of the pieces fit well together when the subsidiaries are humming along. These days? Disney's whistling while it works.

Mad about the mouse? Then check out some of these other recent Disney headlines:

• Disney's Global Magic
• A Disney Year
• More Cheese, Please

Longtime Fool contributor Rick Munarriz has owned shares of Disney since the 1980s and is at the parks often. He also owns shares of Pixar. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.