EURO Disney, the operator of the Disneyland Paris theme park, yesterday reported a 60 per cent jump in pre-exceptional profits for the third quarter in a further sign that its recovery is on track.

Profit excluding exceptional items rose in the three months to June 30th to 146 million French francs (£17.97 million) from Ffr91 million.

Net profit for the 1995/96 third quarter however, fell to Ffr147 million from Ffr170 million due to an exceptional Ffr79 million gain in the year earlier quarter from the repurchase of convertible bonds.

Operating revenues at the park outside Paris packed with more than 40 attractions and at Euro Disney's hotels rose 4.5 per cent to Ffr1.42 billion.

"Growth in revenues and continued cost control more than offset the increase in lease and financial charges which was principally due to the planned reduction of benefits from the 1994 financial restructuring," Euro Disney said in a statement.

Euro Disney's stock shot up 2.25 per cent on the results but then slumped as investors sold heavily into the rally. It closed Ffr1.25 lower, or 9.4 per cent, at Ffr12.10.

Brokers said the stock has fallen so much over the past two years that some investors take the opportunity to sell whenever there is positive news. It tumbled 5 per cent last November after the company reported its first ever annual profit.

Most analysts believe Euro Disney has turned the corner but expect profit growth to be modest because of weak consumer spending, in France and the company's rising debt charges.

Analysts are watching sales growth, given the gradual rise in Euro Disney's debt payments, which had been delayed as part of a 1,994 restructuring aimed at rescuing the company.

After losing more than Ffr7 billion in its first two years, Euro Disney reported an annual profit of Ffr114 million for the 1994/95 year which ended on September 30th.