STUART VARNEY, GUEST HOST: Disney (search) is going high tech. The Mouse House unveiling the Disney Dream Desk PC today. The new kids computer will cost about $800 and comes loaded with games and software for children to draw and edit their own pictures and movies.
All right. Earlier, Disney’s president, Robert Iger (search), told me about this new machine, and he told me about a whole lot more. Just take a look at this.
This is a real computer. It’s not a toy. It offers children the opportunity to entertain themselves, fully, and almost in an infinite way, which is what is great about computers. There’s almost no end to what they can do.
It also offers them an opportunity to be educated, which is great. So it is enlightening in many respects, as much as it is entertaining.
It’s also great for parents. I think that’s very important, since the parent is really the buyer here. It is easy to set up, easy to use, compact, doesn’t take up much room. But most importantly, it has what’s called content watch built in.
VARNEY: Well, exactly. I mean, in June you have gay days at your theme parks. Do you have any gay days on the Mickey computer?
IGER: Well, this is built into it, all kinds of protective devices that protects the kid or the child from going to Internet sites that a parent wouldn’t deem appropriate.
VARNEY: You don’t protect the kids from gay days at the theme parks either. Why do you have to protect them in your computer?
IGER: We don’t sponsor gay days. You know, we are a company that, you know, lets anyone who is willing to pay through our gates. Obviously, there are always some exceptions. And we don’t really comment on the sexual orientation of the people who visit our parks -- our guests, as we call them. And although, you know, we at times offer certain conveniences to make it easier for large groups of any kind to gather at our parks. It’s not something that we sponsor.
VARNEY: Parents would be able to exclude this kind of material?
IGER: Yes, they would, absolutely.
VARNEY: You know, you are sitting in one of the hottest seats in corporate America right now. Do you spend much time looking over your shoulder?
IGER: Not really, no. You have to spend a lot of time when you are in jobs like this concentrating on performance. And Disney is held to a higher standard, in many respects, and so it is incredibly important that, you know, we drive for quality and put product into the marketplace that people have come to expect.
VARNEY: Well, look, in terms of performance, on March the 1st of this year, you specifically said that Disney was going to grow earnings 30 percent in 2004. Are you on track for that kind of profitability?
IGER: We’re actually on track now to grow earnings greater than 50 percent in fiscal 2004.
VARNEY: Let me repeat that. That is better than 50 percent 2004?
VARNEY: Earnings growth?
IGER: Earnings per share.
VARNEY: Earnings per share.
IGER: There are always caveats in this day and age. That excludes any charges that may be associated with the sale of the Disney stores.
We have been public about the fact that we are pursuing a potential sale of the stores. And so that doesn’t include that. And obviously, the year hasn’t ended, and so anything unforeseen, you know, we can’t either predict or control.
VARNEY: But, look, the stock has come down from, what, $27 in March, when you made the announcement of 30 percent earnings growth down to, what, $22 now. How do you account for that if you are going to grow earnings per share 50 percent?
IGER: The marketplace has been somewhat soft in general, particularly for entertainment stocks. I think that has an impact. Our studio hasn’t performed as well as, you know, we would have expected. But it hasn’t in any way prevented us from continuing this prediction that we are going to grow earnings by greater than 50 percent.
VARNEY: So you stick by that?
IGER: I’m confident in it.
VARNEY: If you’re sticking by that, do you feel secure in your position as president?
IGER: Yes, I do. Do I personally feel secure?
IGER: You know, it’s not something that I concentrate on. I concentrate on delivering for the shareholders.
VARNEY: All right. What is the atmosphere around the office? You’ve got all this pressure from the board of directors, from the investors. What is the atmosphere around the office with Mr. Eisner? I mean, you are under pressure.
IGER: Well, you show up at Disney in the morning, and the Seven Dwarfs are, you know, built into the side of our building. So, you know, the atmosphere is Disney.
VARNEY: Has Roy Disney and Stanley Gold -- they are dormant right now, are they?
IGER: I don’t know.
VARNEY: Their challenge is dormant?
IGER: I don’t know. I have no idea.
VARNEY: Are they coming back?
IGER: I don’t know.
VARNEY: Will Comcast come back?
IGER: I don’t know that, either. Brian Roberts is just a phone call away. I don’t know.
But the atmosphere around Disney is good. You know, when you are delivering this kind of performance, there is an upbeat attitude, obviously, an upbeat atmosphere. We’re very excited about a lot of the things that are going on in our businesses. We have a strong senior management.
VARNEY: All this pressure goes right over your head. You don’t even think about it?
IGER: In a way it does.
VARNEY: You don’t look worried, I’ve got to tell you.
IGER: I feel pretty good.
VARNEY: He does. Doesn’t he?
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