Disney unchanged after analyst lunch By Russ Britt, CBS.MarketWatch.com Last Update: 6:05 PM ET Sept. 13, 2002 NEW YORK (CBS.MW) -- A meeting between Wall Street and Walt Disney Co. turned the company's shares from negative to positive, and ultimately to neutral Friday. Disney Chairman and Chief Executive Michael Eisner hosted an early afternoon lunch meeting in New York with analysts and institutional investors. It was to address several key points such as reviving the ABC network, theme-park performance and corporate governance. What was said at the closed-door meeting was not revealed. The Disney chief was expected to do little more than drive home the same themes he's been articulating for the past several months. "They were just in here three weeks ago," said David Miller, an analyst with Sanders Morris Harris in Los Angeles. "I don't think what they're saying will be all that different." But after being down most of the session, Disney shares gained up to 18 cents before ending the day unchanged at $15.50. Shares were down 13 cents at one point. The stock is trading at levels not seen since early 1995. At least one analyst seemed encouraged by what Disney has done thus far this quarter. After lowering expectations in early August for its fiscal fourth quarter ending in September, Disney could beat consensus estimates of 11 cents a share in earnings by 2 cents, said Michael Gallant of CIBC WorldMarkets. Gallant said in a research note issued Friday that attendance at Disney World in Florida is dismal and the picture at ABC has yet to improve. "However, we believe this should be more than offset by easy [comparables] at the box office, a big contribution from 'Monsters Inc.' hitting home video next week, and strong ad pricing at its TV station group," Gallant wrote. Gallant warned, however, that investors should wait to see how ABC performs in the upcoming television season. David Joyce of Guzman & Co. said ABC might not have to be that strong in order to pick itself up off the mat. It just needs to deliver for advertisers, he said. "They don't need to be No. 1 or No. 2, but they do need to deliver the audience levels that they promised advertisers," Joyce said. Miller said many eyes would be focused on the performance of Susan Lyne, ABC's programming chief. Lyne was appointed in a shakeup at ABC earlier this year. Miller said, however, that Lyne was not around when Disney started formulating this fall's schedule. The real test for her comes next year. "She'll get a free look for a year," he said. Disney needs to key in on turning around ABC because it is somewhat powerless to correct problems at its theme parks. The crippled economy, along with a slide in air travel, has killed business for its centerpiece Disney World theme park in Florida. The park relies heavily on air travel for business. Consensus is that until conditions improve, Disney can't do much more to help that situation. The issue of corporate governance has been kicked around for some time, but put to the forefront in the wake of company scandals over the past year. Disney has vowed to trim its 16-member board and eliminate any potential conflicts. Some, however, are looking for more. A group of shareholders led by Providence Capital activist Herbert Denton are meeting Tuesday to discuss, among other things, a viable succession plan for the 59-year-old Eisner. "Lately, it hasn't been too obvious that [Disney President] Bob Iger would be the one to take over," said Joyce. But don't look for shareholders to give Eisner the boot, he said. All they want is reassurance that someone can fill his shoes if needed. It's unclear, though, how many shareholders will attend. Denton has acknowledged that his firm owns a small stake in Disney, ranging in the thousands for a company that has 2 billion shares outstanding. Miller says there is another issue lurking for Disney. Once computer animation studio Pixar Inc. (PIXR: news, chart, profile ) delivers the third film under its current Disney contract, the pact will be up for renegotiation. That movie, "Finding Nemo," is scheduled to hit theaters around mid-2003. Pixar, which was up 20 cents to $46.68, was responsible for the hits "Toy Story," "Toy Story 2" and "Monsters Inc." Miller said Eisner may try to play hardball, but there are many other studios eager to enlist Pixar's services and spotless track record at the box office. "Pixar will have more leverage," he said. Russ Britt is the Los Angeles Bureau Chief for CBS.MarketWatch.com.