Stock fell $3.19 to $57.81
Seagram chief Edgar Bronfman Jr. declared Wednesday that Universal Pictures will be in the black in the fiscal year starting in July 2001.
“Universal Pictures has improved its performance on many levels and has a strong strategic plan to return the business to profitability in fiscal year 2001,” Bronfman said during a four-hour meeting for analysts tracking Seagram at the Universal Studios Orlando in Florida.
The pledge represents the first time Bronfman has committed to a specific date for his long-promised turnaround for the studio, which has cut losses in recent quarters but remains the poorest performer of Seagram’s major assets.
Studio chair Stacey Snider showed analysts a preview reel and presented a strategic overview that stressed seeking films with recognizable stars such as Julia Roberts in “Erin Brockovich,” franchises such as the upcoming “Jurassic Park 3” and niche product with crossover potential such as “American Pie,” which has a sequel in development.
The analyst meeting, the first in 15 months, came amid continued speculation that Seagram has been looking for a buyer for its entertainment holdings despite repeated denials from Bronfman. In response to the only question hinting about the rumors, the topper said he was happy with all of Seagram’s holdings and forecasted “continued strong performance” from the businesses.
Seagram’s stock, which had been rising on sale speculation, fell $3.19 to $57.81 a share after a $3.50 decline Tuesday. Barry Hyman, chief strategist at Ehrenkrantz King Nussbaum, said the dip was not a surprise. “Bronfman is certainly giving the impression that Seagram is not for sale so it’s not unnatural to see the stock come down,” said Hyman, who has a long-term buy rating on the stock. “It could be that he is setting it up for a future sale but I don’t think that’s imminent.”