Eisner Aims Low on Recovery

Walt Disney Co. Chairman Michael Eisner said Tuesday that the stock market has overreacted to Disney’s problems. But the recovery he is forecasting, analysts say, underscores just how tough times have been for the once-dominant entertainment giant.

In a speech at a Goldman Sachs & Co. investor conference in Manhattan, Eisner said he expects Disney to post “strong double-digit EPS [earnings per share] growth in 2003.”

The consensus of analysts surveyed by Thomson First Call is for Disney to earn 56 cents a share in fiscal 2002, which ended Monday, and 71 cents a share in fiscal 2003. That would be a 27% increase, easily meeting Eisner’s double-digit standard.

On the other hand, the company earned 95 cents a share as recently as 1997, and nobody is projecting a quick return to that territory.

“We do expect the company will grow profit substantially,” Prudential Securities analyst Katherine Styponias said, adding, however, that there are “a lot of uncertainties.”

Although she expects the Disney theme parks to rebound and contribute significantly to growth, Styponias said a war with Iraq could lead to another falloff in vacation travel, like the disastrous decline that followed the Sept. 11 terror attacks.

Eisner, in a question-and-answer session after his speech, acknowledged the ongoing talks toward combining Disney’s ABC News operations with those of rival AOL Time Warner Inc.’s CNN, but called reports of an imminent deal “very premature.” He noted those discussions have been ongoing for several years and added: “I wouldn’t rank this as more than a 50/50 possibility at this point.”

With ABC-TV’s lineup a distant third in the ratings, behind NBC and CBS, analysts have called the TV season critical to Disney’s performance. Eisner again sought to lower expectations, saying he doesn’t expect ABC to quickly regain the No. 1 spot; the goal, instead, is “to achieve a clear shift in momentum.”

Staff writer Richard Verrier contributed to this report.