Disney earnings rise 71%; Moore spat nears resolution
By Michael McCarthy, USA TODAY
Walt Disney Co. (DIS) reported strong fiscal second-quarter earnings Wednesday and raised its guidance on earnings for the full year.
It also announced it is near a resolution to the public spat with Harvey and Bob Weinstein, founders of its Miramax unit, over Michael Moore's documentary Fahrenheit 9/11.
Disney said it will sell the film back to the Weinsteins if they can agree on terms. They could not distribute it through Miramax, which Disney acquired in 1993, but could distribute the film themselves or could line up a third-party distributor.
"We are very happy Disney has agreed to sell Fahrenheit 9/11 to Bob and Harvey," Miramax spokesman Matthew Hiltzik said in a statement.
Disney CEO Michael Eisner, on a conference call, said that despite recent claims of censorship by Moore, the filmmaker knew last year that Miramax would not be allowed to distribute the $6 million film that focuses on possible connections between the families of President Bush and terrorist Osama bin Laden.
But the spat highlighted worsening relations between Eisner and the Weinsteins.
Eisner complained to analysts during a Wednesday conference call that most of Disney's business dealings with Miramax are leaked to the press. The Weinsteins are currently in negotiations to extend their Disney deal beyond 2005.
The Moore spat marred a strong second quarter for Disney. Fueled by rebounding attendance at its theme parks and hot DVD sales, net income rose to $537 million, or 26 cents a share, compared with $314 million, or 15 cents a share, for the same period last year. That beat Thomson First Call analyst estimates of 21 cents a share. Revenue increased 11% to $7.2 billion vs. $6.5 billion last year.
The results also spurred Disney to raise its full-year outlook to 50% earnings growth from 40%.
Eisner, who was stripped of his chairman's title after 45% of shares were withheld for his re-election to the board in March, said he has the full support of the board as it studies succession planning.
"The board continues to analyze internal candidates and those who would be appropriate if and when I get hit by a truck — which I hope won't be for a while," Eisner told analysts.
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