Magic Returns for Disney Watchers

Oh, Mickey, you're so fine.

On the week that Walt Disney (DIS Quote) celebrates the 75th birthday of copyright-protected corporate icon Mickey Mouse, the company is also reporting financial results for Disney's fiscal fourth quarter.

With Disney's movie business on a roll, and with its theme park business showing slow and steady improvement, analysts are for the most part predicting improving fortunes for the company.

Yet Wall Street appears split on the outlook for the company's broadcast-TV operations, and some analysts opine that Disney's stock, up 53% over the past eight months, already reflects fiscal 2004's expected improvements.

Disney's shares traded at $22.75 Wednesday, up 23 cents.

At play in Disney's quarterly financials -- due to be released after the market's close Thursday -- are the same issues that were of concern to analysts when the company reported its prior quarter in August.

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The highlight of the fourth fiscal quarter, which ended Sept. 30, is likely to be Disney's studio entertainment division, thanks to home video releases such as Chicago and The Lizzie McGuire Movie, and feature films including Pirates of the Caribbean and Freaky Friday. J.P. Morgan analyst Spencer Wang, for example, recently raised estimates for the division to $2 billion in revenue, up from $1.9 billion in FY2002's fourth quarter, and expects earnings before interest, taxes and amortization -- Disney's and analysts' preferred cash flow measure -- to be $174 million, up from $75 million last year.

Meanwhile, the company's theme park operations continue their slow recovery from the difficulties created by a weak economy and travelers' anxiety. Analysts say occupancy rates in theme park hometowns of Anaheim and Orlando have been improving, but visibility into future business remains low, and attendance has been driven by a major promotional discount. Bank of America analyst Doug Shapiro, for one, expects revenue growth of 5% to $1.7 billion, and EBITA growth of 14% to $267 million.