Posted Friday, December 12, 2003 10:49 AM | Contributed by Jeff
Just over one week after Disney board member Roy Disney resigned, with a slightly brighter outlook for 2004, Wall Street sees no reason to oust the 19-year CEO when the company seems to have retuned its growth engine after years of sluggishness. Disney on Wednesday said profits could grow 30 percent or more in fiscal 2004 ending in September, implying a half-penny share more than it forecast in late November, and Disney projected its beleaguered ABC TV network would profit in 2005.
Read more from Reuters.
They cite the explosion in DVD sales as a plus for Disney. Sure, but when everyone owns a copy of The Lion King on DVD they own it, right? I bet their sales of Cinderella II on DVD aren't going to be quite as impressive.
DCA was built on the cheap but I do give the company the benefit of the doubt that they will improve things as they did at DMGM and as they are now doing at Animal Kingdom (not built on the cheap but lacking in attractions originally). I am not as critical of the new parks but I sure as hell am critical of what is happening at the existing parks. Tomorrowland is a ghost town at the two American parks. 20K Leagues has been an upscale meet and greet at WDW for a few years now. The Dinorama addition at AK, while cute, certainly doesn't scream Disney.
If the new ABC programming ("Doing It"...about 16 year olds contemplating sex, and a rehash of "The Parent Trap") is any idication of where the company is going then I certainly reserve judgment on Eisner's feelings that they will become profitable.
Short sightedness should be left to the Six Flags folks. Disney needs to get back on track and investors shouldn't be counting their chickens just yet.
I think (hope) they'll come around.
Anyway... It's a business, not a charity. The company must make money. The disagreement comes in how they go about that. Roy and Co. feel that a lot of emphasis on short-term gains and stock price is bad in the long run, and I totally agree. I worked for such a company once, and they devalued themselves so badly after getting "quick fixes" that they got delisted off of the NYSE.
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