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Disney expects losses from movies

LOS ANGELES — Shares of The Walt Disney Co. dipped nearly 3 percent Wednesday after the company said it expected fourth-quarter losses of as much as $300 million from its movie studio.

Disney expects losses after a disappointing run of films at the box office, Chief Financial Officer Thomas Staggs said at an investment conference.

The media conglomerate released a large number of titles from its Miramax division during the quarter as it wraps up its decade-long relationship with Miramax founders Bob and Harvey Weinstein.

Most of the films, including "The Brothers Grimm" and "The Great Raid" have done poorly at the box office.

The film "Dark Water" from Disney's Touchstone label also bombed, and the company's usually lucrative direct-to-video titles did not sell as well as expected, Staggs said.

Overall, Disney has seen a decline of 9 percent in domestic box office receipts for this year, compared to last year and a slightly higher decline overseas, Staggs said.

Disney also said it could be forced to write off about $100 million in airplane leases with Delta Air Lines if that company can't resolve its financial problems. Disney invested in airplane leases in the early 1990s, but no longer makes such investments, Staggs said.

Taking a loss on the Delta leases would result in a "meaningful impact on our results for the quarter and the year," Staggs said.

Shares of Disney fell 70 cents, or 2.8 percent, to close at $24.11 on the New York Stock Exchange and fell an additional 2 cents in after-hours trading.

Staggs said that even with the expected losses in the quarter that ends this month, Disney would deliver double-digit earnings growth for the full year on the strength of its broadcast and cable television operations and its theme parks.

Advertising sales at its cable networks, including ESPN, and ABC are running ahead of last year's levels, Staggs said.

Bookings at Disney's domestic parks are also running ahead of last year's levels, he said. The company has not yet experienced significant cancellations at its parks as a result of Hurricane Katrina.

Disney's film slate for next year should also benefit from such high-profile releases as the animated "Chicken Little" and the next installment in its "Pirates of the Caribbean" franchise, Staggs said.