raidermatt
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From cbsmarketwatch.com:
UPDATE 2-Disney sees higher profit, end of ABC losses
12/10/2003 3:26:45 PM
By Peter Henderson and Michael Learmonth
LOS ANGELES/NEW YORK, Dec 10 (Reuters) - Walt Disney Co. (DIS) expects at least 30 percent earnings growth in the current fiscal year and that its money-losing television network ABC will turn a profit in 2005, Chief Financial Officer Tom Staggs said on Wednesday,
ABC recently has been plagued by low ratings and high sports costs, dragging down Disney results. But the network has a modestly successful line of family comedies, and while ratings are still down from the previous year, the wholesale audience defections of recent years has ended.
Sports costs under long-term contracts are also starting to decline, and ABC should be profitable in fiscal 2005, Staggs told investors at a conference.
He said that television advertising prices for spot buying had weakened lately but were still ahead of long-term prices set at the beginning of the summer by double-digit margins.
Staggs did not say whether ABC would have to give free advertising to clients due to missing ratings targets, but he said such advertising, or "make-goods," would not be a factor in Disney results.
Media buyers have said that the major networks collectively face $300 million to $500 million this year in make-good costs, because ratings for network television are lower on the whole and some highly touted new shows have failed.
Disney earnings overall are on track to grow 30 percent or more in the 2004 fiscal year begun in October from an adjusted 65 cents per share in 2003, ended in September, Staggs said.
That suggests earnings of at least 84.5 cents per share, which is marginally stronger than the analyst consensus of three weeks ago of 84 cents, which Staggs endorsed on a Nov. 20 call.
However, Wall Street expectations have risen since then to an average of 87 cents per share for fiscal 2004, according to Reuters Research, a unit of Reuters Group Plc.
Staggs did not comment on the board power struggle sparked just over a week ago by the resignation of Vice Chairman Roy Disney, the last member of the founding family on the board, who called for Chief Executive Michael Eisner to resign.
Disney shares were up 18 cents, less than 1 percent, at $22.27 on the New York Stock Exchange in afternoon trade.
Staggs said Disney's theme parks were seeing strong attendance but that the increase compared with last year could shrink as the quarter progressed and that Disney was still facing higher labor costs.
Theme park attendance was up 11 percent in the first quarter so far compared with a year ago, per capita spending has been in line with last year and hotel room reservations for the current quarter at the parks have been 9 percent ahead of last year, he said.
Staggs said that Disney still expected its sale of the retail Disney Store chain to continue into 2004 and said the Disney Store chain in North America had set record Thanksgiving sales. That comes as Disney is shutting down locations.
Cable sports juggernaut ESPN's chief, Chief George Bodenheimer, told the same conference that ESPN was asking for "significantly less" than a 20 percent rate hike from Cox Cable, a company which wants to strip out ESPN from its package of basic channels.
Bodenheimer declined to give more details, although other Disney executives have said the company aims to cut its rate hikes in order to get cable operators to carry more channels, such as its Spanish-language service.
UPDATE 2-Disney sees higher profit, end of ABC losses
12/10/2003 3:26:45 PM
By Peter Henderson and Michael Learmonth
LOS ANGELES/NEW YORK, Dec 10 (Reuters) - Walt Disney Co. (DIS) expects at least 30 percent earnings growth in the current fiscal year and that its money-losing television network ABC will turn a profit in 2005, Chief Financial Officer Tom Staggs said on Wednesday,
ABC recently has been plagued by low ratings and high sports costs, dragging down Disney results. But the network has a modestly successful line of family comedies, and while ratings are still down from the previous year, the wholesale audience defections of recent years has ended.
Sports costs under long-term contracts are also starting to decline, and ABC should be profitable in fiscal 2005, Staggs told investors at a conference.
He said that television advertising prices for spot buying had weakened lately but were still ahead of long-term prices set at the beginning of the summer by double-digit margins.
Staggs did not say whether ABC would have to give free advertising to clients due to missing ratings targets, but he said such advertising, or "make-goods," would not be a factor in Disney results.
Media buyers have said that the major networks collectively face $300 million to $500 million this year in make-good costs, because ratings for network television are lower on the whole and some highly touted new shows have failed.
Disney earnings overall are on track to grow 30 percent or more in the 2004 fiscal year begun in October from an adjusted 65 cents per share in 2003, ended in September, Staggs said.
That suggests earnings of at least 84.5 cents per share, which is marginally stronger than the analyst consensus of three weeks ago of 84 cents, which Staggs endorsed on a Nov. 20 call.
However, Wall Street expectations have risen since then to an average of 87 cents per share for fiscal 2004, according to Reuters Research, a unit of Reuters Group Plc.
Staggs did not comment on the board power struggle sparked just over a week ago by the resignation of Vice Chairman Roy Disney, the last member of the founding family on the board, who called for Chief Executive Michael Eisner to resign.
Disney shares were up 18 cents, less than 1 percent, at $22.27 on the New York Stock Exchange in afternoon trade.
Staggs said Disney's theme parks were seeing strong attendance but that the increase compared with last year could shrink as the quarter progressed and that Disney was still facing higher labor costs.
Theme park attendance was up 11 percent in the first quarter so far compared with a year ago, per capita spending has been in line with last year and hotel room reservations for the current quarter at the parks have been 9 percent ahead of last year, he said.
Staggs said that Disney still expected its sale of the retail Disney Store chain to continue into 2004 and said the Disney Store chain in North America had set record Thanksgiving sales. That comes as Disney is shutting down locations.
Cable sports juggernaut ESPN's chief, Chief George Bodenheimer, told the same conference that ESPN was asking for "significantly less" than a 20 percent rate hike from Cox Cable, a company which wants to strip out ESPN from its package of basic channels.
Bodenheimer declined to give more details, although other Disney executives have said the company aims to cut its rate hikes in order to get cable operators to carry more channels, such as its Spanish-language service.
