Disney CEO hints at successor amid upbeat 4Q
The Walt Disney Co. posted a surprise 18 percent increase in fourth-quarter earnings Thursday and announced an executive job switch that might point to an eventual successor to Chief Executive Robert Iger.
Los Angeles: The Walt Disney Co. posted a surprise 18 percent increase in fourth-quarter earnings Thursday and announced an executive job switch that might point to an eventual successor to Chief Executive Robert Iger.
Iger, 58, said he was behind the decision to turn Chief Financial Officer Tom Staggs into the parks and resorts chairman, while making parks chairman Jay Rasulo the new CFO.
Staggs, 49, is well respected among Wall Street analysts and had been in his job for 11 years. Rasulo, 53, has pushed a theme park expansion into China and the construction of two new cruise ships, and has been in his current job since 2005.
Both men have been with Disney 20 years or more.
Iger referred to his own career when describing the benefit of giving his CFO experience in Disney`s operational end and having Rasulo gain a better perspective on the entire company.
"Having benefited myself from being given new opportunities over the years, in some cases going to places and businesses I have not been in, I think I can particularly appreciate what a real opportunity this is for both of them," Iger told analysts. "I made both Tom and Jay offers that I felt they couldn`t refuse."
Iger took over from Michael Eisner in October 2005 and last year signed a five-year contract extending through January 2013. He began his career as a weatherman and joined ABC in 1974.
Some analysts wished the men well in their new jobs, but Moody`s Investors Service questioned Rasulo`s "apparent lack of experience in a significant financial role" and called Staggs appointment "very unusual" for a company so large.
Staggs avoided suggestions that he may be being groomed for Disney`s top job.
"I`m certainly not going to speculate on what the future holds and for the moment, Jay and I are both focused on the roles we are assuming," he said.
The executive shuffle, which occurs Jan. 1, came amid signs the company is beginning to emerge from an advertising market hit hard by the recession.
Although ad revenues were still down in the quarter, Staggs said prices for commercial time on the ABC network in the current quarter were up 20 percent from the "upfront" bulk ad buying season earlier this year and trends were improving at ESPN.
Net income for the entire company rose to $895 million, or 47 cents per share, as revenue at its cable, broadcast and movie studio units rose, more than offsetting declines at its parks and consumer products units. Excluding one-time items, earnings per share came to 46 cents, handily beating analyst estimates by a nickel.
Overall revenue rose 4 percent to $9.87 billion in the fiscal fourth quarter that ended Oct. 3.
For the full year, revenue fell 4 percent to $36.15 billion and net income fell 25 percent to $3.31 billion, or $1.76 per share.
Disney recently overhauled executives and operations at its struggling movie studio, which had seen five straight quarters of declining revenue. After a mild fourth-quarter sales uptick, the unit still posted a full-year decline in revenue of 16 percent, with profit down 84 percent.
Iger called the studio results in 2009 "extremely disappointing" but said there was still hope for "A Christmas Carol," which opened weakly last weekend but had an encouraging Veteran`s Day bump. He held out hope that the 3-D remake would pick up steam as Christmas approaches.
Shares rose 66 cents, or 2.3 percent, to $29.71 in after-hours trading Thursday following the earnings release, after closing down 24 cents at $29.05.