Disney Dazzles Wall Street

The assets joining the new company had 2005 revenue of $575 million and operating income of $200 million.

Iger has spent the new year wheeling and dealing. Two weeks ago, the company pulled the trigger on a $7.4 billion acquisition of animation powerhouse Pixar (PIXR Quote), bolstering its movie studio and infusing fresh creative talent, notably Apple (AAPL Quote) chief Steve Jobs.

Iger, who took over last fall after Michael Eisner's long-awaited departure, has been credited with transforming Disney. He has trimmed Eisner's famously Byzantine internal management structure and put together savvy deals to get ABC and ESPN content on new platforms like the iPod.

How much fruit those arrangements will yield down the road remains to be seen. But it is widely accepted that the Apple deal helped soften Jobs to the Pixar deal, which in turn should help Disney by adding Jobs' famous entertainment-industry vision to Disney's often lackluster board.

During the company's earnings call, Iger said he wanted Disney to remain at the forefront of emerging technologies, and he touted the company's arrangement with Apple where the iPod was concerned. Iger said the deal has produced 2.5 million downloads to date, and he added that "the real benefits will be realized in the future when handheld wireless devices are more widely adapted." He also said the iPod and other platforms have the potential to create a major additive revenue stream for Disney's content down the line.

Success has not been easily won when it comes to the company's share price, however. Since Iger took over last fall, Disney shares have risen 5%, while the big-cap S&P 500 is up 7%.

Arthur Pergament of New York-based Pergament Advisors, whose firm has no position in the stock, says that softness in the entertainment division results reflect a weak release schedule but says the "pipeline is starting to improve."