Here's a article that discussed the earnings report more broadly...
Weak Attendance Hurts Disney Shares
11/8/2002 10:50:00 AM
LOS ANGELES, Nov 08, 2002 (AP Online via COMTEX) -- Shares of The Walt Disney Co. slumped 3 percent Friday after the entertainment giant reported a larger fourth-quarter profit but said attendance at its theme parks remained weak.
Disney chairman and chief executive Michael Eisner said 2002 was particularly difficult, but that the company would reap the benefit of capital investments by showing revenue growth of "well over 20 percent" in 2003.
The company said its profits more than quadrupled to $222 million, or 11 cents per share, on the strength of hit films such as "Signs" and "Lilo and Stitch." That compares with net income of $53 million, or 3 cents per share, a year earlier.
Taking into account the effect of new accounting rules and applying that to last year, Disney's earnings in the fourth quarter of 2001 would have been $188 million, or 9 cents per share.
The results matched the consensus expectations of analysts surveyed by Thomson First Call.
Revenues during the quarter increased 15 percent to $6.66 billion, compared to $5.79 billion in the same period last year.
Disney said it expects earnings per share growth of greater than 20 percent in the next two years.
Still, shares of Disney fell 57 cents to $17.69 in early trading Friday on the New York Stock Exchange.
Eisner said intensive capital investment over the past five years has created a "protective moat" around the company's assets.
"Our branded assets are safer and more secure so they can thrive in the years to come," he said.
Eisner said Disney continues to talk to potential buyers of its World Series-winning Anaheim Angels baseball team. Discussions are also continuing between Disney and AOL Time Warner over a possible merger of ABC News and CNN.
The company showed the greatest strength in its film studio, which showed operating income of $149 million during the quarter, compared to a loss of $121 million in the same period last year.
The studio benefited from sales of more than 25 million copies of the Pixar animated film "Monsters, Inc.," of which Disney keeps half. Home video sales of other titles, including "Snow White," were also strong in the quarter.
Disney's weakest segment was its media networks division, which includes the ABC Television network and cable channels such as ESPN and ABC Family. Operating income there fell 60 percent to $147 million from $348 million in the same period last year.
Ratings at ABC fell dramatically during the year, although the company has shown some ratings strength on several nights since the launch of the fall season.
Disney president Robert Iger said the network is delivering the ratings it promised to advertisers, but that it would probably take a few more years for ABC to become profitable again.
Increased licensing fees for broadcasting sporting events will hurt profits at ABC and ESPN early in the next fiscal year, he said.
"We obviously are crawling back out of a hole that is larger than we ever hoped," Iger said.
Operating income at Disney's theme parks was off 25 percent to $235 million.
Chief financial officer Thomas Staggs said key international attendance has been increasing at the company's two domestic parks.
For the full year, the company reported net income of $1.28 billion, or 63 cents per share, compared to a loss of $158 million, or 2 cents per share in the same period last year.
Analysts had expected annual earnings of 55 cents per share.
Yearly revenues increased 1 percent to $25.33 billion, compared to $25.17 billion the previous year.
Excluding a one-time gain from the sale of investments this year and one-time losses last year relating to the closing of some Disney stores and the Go.com Internet business, Disney reported annual profits of $1.28 billion this year compared to $1.34 billion in the same period last year.
Disney has started publishing supplementary data showing results as if stock options were expensed.
On that basis, Disney would have reported earnings in the fourth quarter of $140 million, or 7 cents per share, and earnings for all of 2002 of $977 million, or 48 cents per share.
The results were released after markets closed. Shares of Disney fell 60 cents to $18.26 at the end of regular trading on the New York Stock Exchange. They fell another 25 cents in extended trading.
Copyright 2002 Associated Press, All rights reserved
