Walt Disney Co's (DIS) quarterly results were disastrous but not nearly as disastrous as Wall Street expected. Maybe Snow White's fairy godmother lent a hand.

Net income plunged 46 percent to $613 million, or 33 cents a share, compared with $1.13 billion, or 58 cents, a year earlier. Revenue at the Burbank, Calif-based entertainment company fell seven percent to $8.09 billion. Free cash flow plunged 40 percent to $1.35 billion.

Excluding one-time items, profit was 43 cents versus 58 cents a year earlier. The parent of the ABC television network and Walt Disney World was expected to earn 40 cents on revenue of $8.15 billion, according to Thomson Reuters. Wall Street and shareholders (including me) were worried that Disney would be hurt by declining advertising sales and lower theme park attendance.

Indeed, Chief Executive Robert Iger described the quarter as "difficult" but the company responded by sticking to its core strategy. Disney's Media Networks business, its most profitable, performed well. Revenue rose two percent while operating profit slipped by four percent. The picture was much uglier at the other Disney units such as Parks and Resorts and Studio Entertainment which recorded double-digit declines.

Disney's stock has been far from magical this year, under-performing rivals including Viacom Inc. (VIA) and News Corp. (NWS). But I am going to stick with the stock because the theme park business should rebound as the economy improves.

Moreover, in 2006 there was a baby boom in the U.S. Those kids -- including mine -- are just discovering Mickey Mouse and friends.

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