Disney in CFO Swap11/13/2009 10:43 AM Eastern
On a day when it reported fiscal fourth quarter results that beat analyst estimates on practically every front, The Walt Disney Co. said its long-time chief financial officer Thomas Staggs would step down from that position to become chairman of Disney's Parks and Resorts division. At the same time, former Parks and Resorts chairman head James (Jay) Rasulo would become CFO.
The news came as Disney reported strong earnings growth despite the weak economy. Revenue was up 4% in the fiscal fourth quarter to $9.9 billion (beating consensus estimates of $9.25 billion) and net income rose 18% to $895 million, or 47 cents per share (ahead of consensus of 41 cents per share). For the full year, revenue declined 4% to $36.1 billion and net income declined 25% to $6.7 billion.
Cable networks were the bright spot for the media giant, with revenue up 14% to $3.3 billion and operating income up 19% to $1.5 billion in the period. Its broadcasting unit, battered by the downturn in advertising, reported a 14% increase in revenue to $1.4 billion, but showed an operating loss of $71 million in the quarter compared to operating income of $2 million in the prior year. For the full year, cable networks revenue increased 5% to $10.6 billion and operating income rose 3% to $4.3 billion. At the broadcasting unit operating income declined 40% for the year on a 3% decline in revenue.
The swap of Staggs and Rasulo didn't appear to rattle analysts, as both are long-time Disney executives. Staggs, who has been CFO since 1998, joined Disney in 1990 and Rasulo is a 23-year veteran of the company.
In a statement, Disney CEO Bob Iger said the move was made to give the two executives broader experience in the company.
"Jay and Tom are both dynamic and versatile executives, who have done a great job over the last several years and have helped me to shape Disney's strategic direction," Iger said in a statement. "By giving them exciting new challenges that build on both their strengths at a time when each of their respective areas are on the right strategic track, the change is good for them and good for the company."
Miller Tabak media analyst David Joyce said the move was a good one for the company.
"Giving these long-time executives new, essentially lateral roles is a smart long-term succession planning move," Joyce said. "While Bob Iger is still young by CEO standards, I would not expect a CEO change for many years, but it is good to have a very knowledgeable deep bench."