Disney runs CEO search 'with open minds'
By Michael McCarthy, USA TODAY
As Disney (DIS) surprised Wall Street with a better-than-expected 5.1% first-quarter earnings boost Monday, Chairman George Mitchell had a message for those thinking Disney No. 2 Robert Iger is a shoo-in to succeed CEO Michael Eisner.
"The board is conducting the search in good faith, with open minds, and without any prior determinations or preconditions," Mitchell said in a statement to USA TODAY. Mitchell is expected to address the CEO question Tuesday as Disney finishes its annual two-day analyst conference in Orlando. The search is supposed to wrap up by June.
Mitchell confirmed that timeline Tuesdsay. "We are committed to announcing our decision no later than this June," he told investors.
Disney said profit rose to $723 million, or 35 cents a share, for the fiscal first quarter ended Dec. 31, from $688 million, or 33 cents a share in the period a year ago. Analysts had expected 29 cents a share. Revenue ticked up to $8.7 billion from $8.6 billion, a 1.4% increase over last year.
Driven by higher ad revenue at ESPN, the company's TV networks group led the growth with a 36% increase in operating income. Operating income at Walt Disney World and the other theme parks rose 11% on rebounding international tourism.
ABC did not yet show higher ad revenue from price increases for new hits such as Desperate Housewives and Lost because most of the ad time for the quarter was sold in advance last spring. The higher ad rates now in effect will show up in results later this year, helping the network achieve profitability, Disney Chief Financial Officer Tom Staggs told analysts.
Operating income at Disney's film studio dropped 27%, due to a difficult comparison with its record first quarter of 2004 when smash films like Finding Nemo and Pirates of the Caribbean hit home video.
Disney results were reported after the markets closed. Disney shares had risen 40 cents to close at $28.63. In after-hours trading, they gained 4 cents to $28.67.
Mitchell's statement that the CEO search is still open should keep talk going. Among names getting buzz as contenders: Peter Chernin, Rupert Murdoch's No. 2 at News Corp.; Viacom co-presidents Leslie Moonves and Tom Freston; Meg Whitman of eBay; and Terry Semel of Yahoo.
The board has said Iger is the sole internal candidate to succeed Eisner, who has said he will step down when his contract expires in September 2006.
With Disney's 53-year-old president and chief operating officer finally delivering on his longstanding promise to resuscitate ABC, a growing number of analysts support Iger's candidacy.
"Given the way the company has performed and the stock has rebounded, the board has to pick Iger," says Paul Kim, media analyst for Tradition Asiel Securities. "Why rock the boat?"
But Iger will face tough competition if challenged by someone with a track record like the one Chernin, 53, has amassed at News Corp. and its Fox unit.
"Chernin's the type of person you want to see if they're doing a real search," says Richard Moore, state treasurer of North Carolina, which owns over 2 million Disney shares. "He's done a good job. He clearly has the skill set."
Contributing: Reuters
By Michael McCarthy, USA TODAY
As Disney (DIS) surprised Wall Street with a better-than-expected 5.1% first-quarter earnings boost Monday, Chairman George Mitchell had a message for those thinking Disney No. 2 Robert Iger is a shoo-in to succeed CEO Michael Eisner.
"The board is conducting the search in good faith, with open minds, and without any prior determinations or preconditions," Mitchell said in a statement to USA TODAY. Mitchell is expected to address the CEO question Tuesday as Disney finishes its annual two-day analyst conference in Orlando. The search is supposed to wrap up by June.
Mitchell confirmed that timeline Tuesdsay. "We are committed to announcing our decision no later than this June," he told investors.
Disney said profit rose to $723 million, or 35 cents a share, for the fiscal first quarter ended Dec. 31, from $688 million, or 33 cents a share in the period a year ago. Analysts had expected 29 cents a share. Revenue ticked up to $8.7 billion from $8.6 billion, a 1.4% increase over last year.
Driven by higher ad revenue at ESPN, the company's TV networks group led the growth with a 36% increase in operating income. Operating income at Walt Disney World and the other theme parks rose 11% on rebounding international tourism.
ABC did not yet show higher ad revenue from price increases for new hits such as Desperate Housewives and Lost because most of the ad time for the quarter was sold in advance last spring. The higher ad rates now in effect will show up in results later this year, helping the network achieve profitability, Disney Chief Financial Officer Tom Staggs told analysts.
Operating income at Disney's film studio dropped 27%, due to a difficult comparison with its record first quarter of 2004 when smash films like Finding Nemo and Pirates of the Caribbean hit home video.
Disney results were reported after the markets closed. Disney shares had risen 40 cents to close at $28.63. In after-hours trading, they gained 4 cents to $28.67.
Mitchell's statement that the CEO search is still open should keep talk going. Among names getting buzz as contenders: Peter Chernin, Rupert Murdoch's No. 2 at News Corp.; Viacom co-presidents Leslie Moonves and Tom Freston; Meg Whitman of eBay; and Terry Semel of Yahoo.
The board has said Iger is the sole internal candidate to succeed Eisner, who has said he will step down when his contract expires in September 2006.
With Disney's 53-year-old president and chief operating officer finally delivering on his longstanding promise to resuscitate ABC, a growing number of analysts support Iger's candidacy.
"Given the way the company has performed and the stock has rebounded, the board has to pick Iger," says Paul Kim, media analyst for Tradition Asiel Securities. "Why rock the boat?"
But Iger will face tough competition if challenged by someone with a track record like the one Chernin, 53, has amassed at News Corp. and its Fox unit.
"Chernin's the type of person you want to see if they're doing a real search," says Richard Moore, state treasurer of North Carolina, which owns over 2 million Disney shares. "He's done a good job. He clearly has the skill set."
Contributing: Reuters