Magic Returns to Kingdom Of Disney Due to Film Boost By SHELLY GARCIA Senior Reporter Two runaway summer movie hits are helping to boost the profile of the Walt Disney Co. on Wall Street. The twin successes of “Finding Nemo” and “Pirates of the Caribbean,” have helped Disney’s stock price to outpace the upturn in the general market, even as news of a deadly accident at Disneyland hit the front pages. And while analysts acknowledge that the volatility of the movie segment makes it difficult to bet the farm on those successes, in Disney’s case a spate of movies with strong box office showings in addition to the two summer blockbusters, along with improvements at Disney’s television arm, ABC, and an anticipated upturn in theme park business are all contributing to an improved profit picture and corresponding stock price performance. “Disney is up 30 percent this year since January 1 and the overall market is up half of that,” said Jeffrey S. Thomison, vice president at Hilliard Lyons, an investment firm in Louisville, Ky. of the company’s share price, “so, so far, they’ve doubled the market.” Disney will release its fourth quarter and fiscal 2003 results in November, but the company has continued to show improvement throughout the year, particularly in comparison to its fiscal 2002 performance. “The year around the Sept. 11 attack really culminated in a perfect storm for Disney,” said David C. Joyce, senior equity analyst for cable and media with Guzman & Co. in Miami. “They had run what had been a popular and successful show, “Who Wants to Be a Millionaire?” into the ground. They also had lost the first Oscar for an animated feature film, ‘Monsters Inc.,’ to another company, Dreamworks for ‘Shrek.’ And they had just opened California Adventure that was more a retail location so people were disenchanted by the mix. ” Making changes Since then, Disney brought in a corporate governance expert and made changes to its board of directors. It has begun to rebuild its television lineup with “Eight Simple Rules” and “According to Jim” with Jim Belushi. It has announced plans to sell off many of its retail stores and it has had a string of movie hits. While “Finding Nemo,” which so far grossed $330 million in domestic ticket sales, and “Pirates of the Caribbean, with a take thus far of more than $280 million, have been the undisputed leaders in the box office race this summer, Disney has also registered a number of other strong films in its win column this year. Among them, “The Lizzie McGuire Movie,” which cost about $17 million, grossed more than $50 million. “Freaky Friday,” produced at a cost of about $26 million, has so far brought in $97 million at the box office. While box office receipts for the industry this summer were up about 2 percent over the same period last year, Disney reported revenues in its studio entertainment division rose 5 percent for the most recent quarter ended June 30, 2003. Companywide, Disney registered net income of $400 million or $0.19 per share on revenues of $6.2 billion for its third quarter 2003. That compares with earnings of $364 million or $0.18 per share on revenues of $5.8 billion for the third quarter of 2002. Not all convinced Some analysts have been less than impressed by Disney’s recent performance, pointing out that its ABC network is still lagging and the consumer products division has been trending downward. But the recent studio successes along with the company’s other efforts have generally been well received on Wall Street. “Business has improved and expectations have gone up,” said Thomison, who has raised earnings estimates for the full year to $0.63 from $0.60 per share. The generally sanguine attitude has been reflected in the company’s share price, which has risen from the $15 range last year at this time to the $21 range currently. On Friday, Sept. 12, shares in Disney closed at $20.24. Analysts do not expect the recent accident at Disneyland in Anaheim, which left one person dead and 10 others injured, to negatively affect the company’s share price either.