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Eisner upbeat on Disney
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January 3, 2002: 9:31 a.m. ET
Chairman cites cost cutting, sees international unit profitable by 2003.
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NEW YORK (CNN/Money) - Walt Disney Co. Chairman Michael Eisner gave a bullish outlook for the media conglomerate in his annual letter to shareholders, released Thursday, even as the company continues to struggle with slower business in a down economy.
Media companies have been struggling from declining advertising revenue and continuous commercial-free news coverage in the days following the Sept. 11 terrorist attacks. Disney owns the ABC television network.
Eisner said he anticipates the company's Internet unit, hard hit by layoffs in 2001, to be profitable by the end of 2002 and said the International unit holds the greatest opportunity for growth. Eisner expects the international television division to turn profitable by 2003 along with the Fox Family/Fox kids units, which Disney recently acquired.
"These assets are completely complementary to our existing holdings, and they all go to Disney's "sweet spot" of entertainment for children and families," Eisner said of Fox Family. "For this reason, I anticipate a remarkably swift integration into the company, followed by rapid growth and increases in profitability."
The company also plans to shutter 50 more Disney retail stores, bringing the total number to between 300 and 400.
Eisner also highlighted the defensive cost-cutting moves Disney took in 2001 as the economy steadily slid into a recession. Among them, he noted that Disney slashed 4,000 jobs and initiated a streamlined buying initiative expected to save $200 million a year.
Walt Disney Studios also cut its annual investment in live-action films by $600 million by streamlining the script development process and eliminating unproductive talent deals.
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Eisner said ABC continues to do well with daytime programming and news, but that primetime evening viewing presents a challenge.
Disney (DIS: Research, Estimates) shares gained 73 cents to $21.45 Wednesday. 
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