Disney sees war hurting revenues, but a Muppet buy soon

Disney (N:DIS) CFO Tom Staggs told shareholders yesterday (3/19) that the war with Iraq has dashed the company's hopes of growing earnings by 25-35% this year, with "more moderate" growth now expected. But, on a brighter note, CEO Michael Eisner confirmed that the company is on the verge of buying the Muppets.

Disney executives went on with the company's annual shareholders meeting, despite a snowstorm that prevented some people who wanted to attend from being able to make it to Denver - - the site selected this year. Since most shareholders vote by proxy, even if they show up in person, there was no problem getting enough votes to carry on business. All directors standing for election were approved and four measures proposed by dissident shareholders - - including one to tie executive stock options to performance goals - - were soundly defeated.

While Staggs noted that ABC Television has halted its ratings erosion and begun to improve, with revenues hopefully to follow, problems remain with the company's theme parks - - problems made worse by war and the threat of terrorism discouraging tourism. Although he couldn't predict when the economy will turn around, Staggs said Disney's theme parks are well positioned to "improve profitability and take advantage of growth opportunities as global conditions improve."

In the question and answer period with shareholders, Eisner confirmed what we reported earlier this month (3/10 RBR Daily Epaper #48) - - Disney is about to buy the Jim Henson Co. from Germany's EM.TV. That would add the Muppets to the Disney stable.

"I would not be surprised to hear that there would be an announcement soon," Eisner gushed. "I wouldn't be surprised that the Walt Disney Company would be finally culminating years of romance."