Disney's theme parks have just celebrated their 50th anniversary

Net income in fiscal second quarter was $698m (�373m) compared with $537 a year earlier. Sales gained 9% to $7.83bn.

Increased visitor numbers at the firm's theme parks also helped lift profits.

Renegotiating a distribution agreement with animation studio Pixar will be key to future growth, as will attendance at parks like Disneyland, analysts said.

Time to talk

Disney's current agreement with Pixar, the company behind hits including Toy Story and Finding Nemo, is due to end with the 2006 release of the movie Cars.

Talks between Disney and Pixar broke down over how profits would be shared, though there have been signs that the two companies may be willing to reopen talks.

The power of Mickey Mouse

Disney boss Michael Eisner is to be replaced by Robert Iger, a move that has brought positive comments from Pixar.

The Incredibles, Disney's fifth film with Pixar, has sold more than 23 million copies on DVD since it was released in March.

Disney's film success was not just about Pixar. It also benefited from the re-release of classic film Bambi and the unexpected success of The Pacifier, starring Vin Diesel.

The studio unit, which includes Walt Disney Studios and Miramax, saw its income rise by 65% to $253m in the quarter. Sales were up 5% at $2.3bn.

Income at the company's theme park division gained 3% to $193m.

Wednesday's earnings were released an hour earlier than expected after an internal email containing figures was accidentally sent out.

Trading in Disney shares was temporarily halted in New York.