Burbank, California-based The Walt Disney Co. has reported a drop in
fourth-quarter profits. The entertainment company, which owns a film
studio, a TV network (ABC) and runs theme parks around the world, said net
income fell to $85 million, or 4 cents a share, from $296 million, or 14
cents a share, in 1998. Disney's earnings for its fourth quarter which
ended September 30 included charges for acquiring Internet search service
Infoseek Corp. Excluding the charges, profits fell 37 percent to $212
million, or 10 cents a share, from the previous year. One day after Disney
announced its fourth-quarter results, Disney stock dropped 8% to $24.31. On
Friday, November 5, Eisner held his first-ever conference call with Wall
Street analysts and investors to discuss the fourth-quarter report, and
warned that earnings would likely remain flat for the current fiscal year
and until sometime in 2001. Eisner outlined a strategy of trimming capital
spending, cutting costs and eliminating redundancies. These measures, he
said, should lead to about $500 million in annual savings starting in 2001.
Eisner is expected to unveil a new DVD-focused home video strategy on
Wednesday, November 10 at an analysts meeting in Burbank. Disney support
for DVD came belatedly, as they initially chose to support the now defunct
DIVX platform instead of DVD. However, Disney has already begun releasing
its classics on DVD, beginning with PINOCCHIO on November 2. Disney has a
huge library of animation, including many titles, especially shorts, which
have not been released on home video for many years, or have never been
released at all. Perhaps DVD will prove to be the ideal home video platform
for 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 1998
issue of Animation World Magazine.
