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Disney reports fourth-quarter slump

Burbank, California-based The Walt Disney Co. has reported a drop infourth-quarter profits. The entertainment company, which owns a filmstudio, a TV network (ABC) and runs theme parks around the world, said netincome fell to $85 million, or 4 cents a share, from $296 million, or 14cents a share, in 1998. Disney's earnings for its fourth quarter whichended September 30 included charges for acquiring Internet search serviceInfoseek Corp. Excluding the charges, profits fell 37 percent to $212million, or 10 cents a share, from the previous year. One day after Disneyannounced its fourth-quarter results, Disney stock dropped 8% to $24.31. OnFriday, November 5, Eisner held his first-ever conference call with WallStreet analysts and investors to discuss the fourth-quarter report, andwarned that earnings would likely remain flat for the current fiscal yearand until sometime in 2001. Eisner outlined a strategy of trimming capitalspending, cutting costs and eliminating redundancies. These measures, hesaid, should lead to about $500 million in annual savings starting in 2001.Eisner is expected to unveil a new DVD-focused home video strategy onWednesday, November 10 at an analysts meeting in Burbank. Disney supportfor DVD came belatedly, as they initially chose to support the now defunctDIVX platform instead of DVD. However, Disney has already begun releasingits classics on DVD, beginning with PINOCCHIO on November 2. Disney has ahuge library of animation, including many titles, especially shorts, whichhave not been released on home video for many years, or have never beenreleased at all. Perhaps DVD will prove to be the ideal home video platformfor these films.

To get a handle on the great number of Disney tapes being sold read "Dig This! Millions of Disney Videos" by Zahra Dowlatabadi in the November 1998issue of Animation World Magazine.