At Disney's recent AGM in Denver, company chief financial officer, Tom Staggs, said the company's hopes of increasing earnings by more than 25 per cent in 2003 could be affected by events in the Middle East.

The company said late last year it expected earnings to grow by 25-30 per cent, but was now expecting more moderate growth for the year.

Theme park attendance, which fell severely after 11 September 2001 has now recovered but not to pre-September 11 levels. The Disneyland site in California has seen an increase in visitors but numbers are down at the company's sites in Florida, which are more dependent on visitors from abroad.

Sales at the Disney Stores chain are down, with figures for outlets open at least a year having shrunk in the current quarter compared with last year.

On the up side, Disney chair and chief executive, Michael Eisner, indicated that the company might soon be making an announcement about a deal involving the Henson company.

Disney had been close to buying the company, best known for the Muppets, some years ago but the deal fell through. It was subsequently bought by German media company EM.TV in 2000.

Eisner would not be drawn on the cost of the purchase, beyond saying it would be nowhere near the $100-200m suggested in some quarters. Details: www.disney.go.com