Disney profit beats forecast despite studio decline

Net income rises 1% to $1.85 billion

Walt Disney Co posted a slightly higher quarterly profit that beat Wall Street expectations, even though its movie studio earnings declined as hit film "Iron Man 3" failed to match the spectacular success of last year's "The Avengers."

Pre-release marketing costs for box office bomb "The Lone Ranger" helped drag down operating income at the studio division by 36% from a year earlier, Disney said on Tuesday.

Disney expects a loss of $160 million to $190 million in the quarter that ends in September for the Johnny Depp movie, Chief Financial Officer Jay Rasulo said.

Disney shares fell 1.5% to $66.06 in after-hours trading, from their $67.05 close on the New York Stock Exchange.

Overall, net income rose 1% to $1.85 billion in the quarter that ended in June. Adjusted earnings-per-share reached $1.03, beating the $1.01 average forecast from analysts polled by Thomson Reuters I/B/E/S.

Operating income increased at the company's theme parks and its media networks division, which operates sports channel ESPN.

"Overall it was a decent quarter, but nothing to get excited about," Wunderlich Securities analyst Matt Harrigan said.

A gain in fees and advertising revenue at ESPN helped lift operating income at Disney's media networks by 8% to $2.3 billion for the quarter.

At the parks unit, operating income increased 9% to $689 million as more people visited Disney's theme parks in Florida and California.

The interactive gaming unit posted a loss of $58 million. The company is counting on the August 18 release of its Infinity game to turn the unit profitable.