Walt Disney Plans to Split Its Stock 4 for 1

Entertainment giant Walt Disney Co., whose stock has surged to record levels this year, said Tuesday that its board of directors voted for a 4-for-1 stock split.

Chairman Michael Eisner announced the plan at the company’s annual meeting, held at Disney World. The news brought cheers from the 4,000 stockholders in attendance.

“The price of our shares has recently moved higher after having been well above the $100 figure for most of the past three years,” Eisner said. “By taking this action, our board hopes to make Disney shares accessible to a broader segment of the investing public.”

Disney’s jumped $3.50 to $146.50 on the New York Stock Exchange.

The stock split is expected to become effective April 20, subject to shareholder approval, the company said.

The company’s last stock split was a 4-for-1 exchange in February, 1986.

Stock splits do not directly increase the value to a shareholder, but they are a bullish sign for Wall Street and share prices typically rise when a company announces a split. Eisner said Disney will continue to look to its movie and consumer products divisions to boost profits.

Theme park attendance, which was flat last year, already is rebounding and will be boosted further by the April 12 opening of Euro Disney outside Paris, Eisner said.

“We’re modestly optimistic about the (current) second quarter,” he said. “Our hotels are booking well, our movies and consumer products stores are doing well.” The company’s second fiscal quarter ends March 31.

Disney also said that it has scrapped plans to build a movie theme park in Tokyo adjacent to the Disneyland there.

A spokesman said the Burbank-based company will explore other ideas for a second park in Japan.

Euro Disney’s results won’t begin to boost Disney’s profit until the fiscal third quarter, stock analysts noted.

Even so, they project that Disney will earn $1.20 per share in the second quarter, compared to 95 cents in the comparable 1991 quarter.

“All business lines will be up,” said Shearson Lehman Bros. analyst Raymond Lehman.

For the quarter that ended Dec. 31, Disney posted its first earnings increase in more than a year--$208.1 million, or $1.56 a share, compared to $170.4 million, or $1.28 a share, a year earlier.