Hey, Disney(NYSE: DIS), you just nailed fourth-quarter estimates to close out your fiscal year on a 13% surge in revenue. What are you going to do next?
If you hear "keep growing," don't take off your Mouseketeer ears. You heard right. After watching earnings fall every year since 1997, it looks like Disney's finally ready to turn the corner. With the company guiding analysts toward 20% to 30% profit growth in fiscal 2003, and again come 2004, is the entertainment giant now the Belle at the ball?
Let's call off the corkscrew and leave the bubbly on ice. Even if Disney grows its bottom line at a 20% annualized clip, the company won't eclipse its 1997 earnings until fiscal 2006. Disney may have produced a solid summer run at the box office, reversing an operating loss in that division, but ABC still struggles to earn the bronze medal, and international travel to the company's domestic theme parks has fallen by 20%.
While Disney thumps its chest over attendance gains at the troubled California Adventure attraction and higher ratings through a new slate of ABC shows, it's a bit misleading (like its earnings gains). It set the bar so low last year that upticks were practically a lock.
Really. While some of ABC's latest shows, such as 8 Simple Rules for Dating My Daughter and Life With Bonnie, have been well-received by critics, they have yet to crack the Nielsen Top 20 ratings. And for the poorly funded California Adventure, if tumbleweed could make a turnstile click, maybe we'd have some real numbers.
Operating profits for the parks division fell by 25% for the period, despite the higher foot traffic at California Adventure. While the company credits those gains to the introduction of a new play area, themed to Pixar's(Nasdaq: PIXR)A Bug's Life, calling the addition "inventive" (as Disney did last night) is a bit of a stretch. It's just standard carnival kiddie rides with slapped-on themes.
Sure, Disney keeps growing, but someone better remind Dopey that gains at the height stick are relative.
