The Motley Fool, 11/16/06
Fool on Call: The Magic of Disney

By Jeremy MacNealy

For a media company the size of Walt Disney, a 14% sales increase in its most recent quarter is quite remarkable. Was it magic? Well, no, but that isn't to say that Walt Disney still doesn't have that magic touch upon children and adults alike -- it clearly does.

My Foolish colleague Rick Aristotle Munarriz provided an extensive look into what's been driving growth for the company over the past year. You'll see that it experienced growth across all of its major business segments -- networks, parks, studio, and consumer products.

Rick also highlighted that in fiscal 2007, you won't see Disney resting on past successes; it plans to increase capital expenditures during the year somewhere in the neighborhood of $400 million to $500 million, according to the conference call. Approximately half of this increase will be devoted to theme-park development, which will further reinforce Disney's competitive advantage against the likes of Cedar Fair and Six Flags. The other half of the increase will be dedicated to digital initiatives.

We'll use this latest edition of Fool on Call to look at those initiatives. Using the company's latest quarterly earnings conference call, we will unearth some of the steps Disney is taking to expand in the following high-growth segments:
  • Internet and downloadable content.
  • Interactive gaming.
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