It seems only months ago that credit rating agencies were threatening to downgrade Comcast
While the tweak may not seem like much -- going from negative to stable -- it's a step in the right direction. However, the timing may at first appear peculiar.
- Interest rates are rising, spiking the borrowing costs of such leveraged companies as Disney.
- Just last week CEO Michael Eisner suggested that Disney should hike its dividend, pleasing shareholders but creating an even larger payout burden for the company's cash flow.
- This past weekend's dismal opening for King Arthur indicates that the company will need to lance a lot to keep pace with last year's theatrical successes.
So, are the S&P folks looking to make creditors more poor than standard? Of course not. S&P knows all about Eisner's words and, yes, it remembers The Alamo. But Disney is humming along nicely with plenty of leeway to overcome plumper yields and box-office duds. An improving economy will make the turnstiles click faster at its theme parks and a healthier advertising market will work wonders for its network business.
While Disney is looking to earn just $0.98 a share this year -- near the $0.97 a share it earned three years ago -- it sees double-digit earnings growth from here on out.
While there are plenty of long-term concerns, like how it will fill the Pixar
Just as significant is that the two live-action movies that may prove to save Disney's summer -- M. Night Shyamalan's classy The Village and the feel-good Princess Diaries 2 -- are still weeks away from their curtain calls.
So give Disney some credit. S&P apparently thinks the company has earned it.
Do you think Disney is really on the mend? Would you spot Eisner a fiver? Do you think Disney's two big summer films will save the celluloid season? All this and more -- in the Disney discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz owns shares in Disney and Motley Fool Stock Advisor recommendation Pixar.
