Entertainment giant Walt Disney Co. announced Tuesday that it will seek a four-for-one split of the company's common stock, the first such move in six years.
Disney's chairman Michael D. Eisner made the announcement to about 4,000 shareholders attending the company's annual meeting at Walt Disney World Resort. A special shareholders' meeting to seek approval of the split will be held on April 20 at Burbank, Calif.Shares of Disney, a component of the Dow Jones industrial average, gained $3.50 to close at $146.50 a share Tuesday on the New York Stock Exchange.
"The price of our shares has recently moved higher after having been well above the $100 figure for most of the past three years," Eisner said. "By taking this action, our board hopes to make Disney shares accessible to a broader segment of the investing public."
Disney's last stock split was a four-for-one exchange in February 1986.
Analysts had speculated that Disney might split its stock because of statements from executives that they would consider doing so if the stock traded above $125 a share for an extended period. But some had been doubtful of such a move, given the administrative costs, since about 70 percent of Disney's shareholders hold fewer than 100 shares.
Disney recently put an end to a year of profit declines, posting a 22 percent earnings increase to $208.1 million, or $1.56 a share, for its first quarter ended Dec. 31, compared with $170.4 million, or $1.28 a share, for the year-ago quarter. Revenues were $1.94 billion, a 30 percent increase from $1.49 billion for the year-ago quarter.
The earnings gain was partly due to good performances by its film "Beauty and the Beast" and the home video release of "Fantasia."
Disney had been hit hard by declines in attendance at its theme parks for the past year.