NEW YORK -- Shares in Walt Disney Co. tumbled Thursday $1.93 to $30.56, its lowest point since early January, as Wall Street analysts reduced their earnings forecasts for Disney's 1999 and 2000 fiscal years in the wake of Tuesday's disappointing second-quarter tally.

Driving the stock slide is the widespread belief that Disney's earnings slump, which has gradually worsened over the past 12 months, is likely to continue for at least another 18 months.

Most analysts now expect Disney's fiscal 1999 earnings to drop about 20% from fiscal 1998, which was a stagnant year compared with fiscal 1997. The main contributors to the earnings slump are poor performances from homevideo and merchandising, both big profit drivers in the mid- to late '90s.

And while the estimates for fiscal 2000 assume some upturn, the forecast profit for that year would still be well below what the House of Mouse earned last year.

Startling estimates

What's particularly startling to many analysts is that average earnings estimates for this year, now 70� a share or $1.45 billion, are close to 50% below what Wall Streeters were expecting for fiscal 1999 roughly a year ago. The estimates have been repeatedly cut over the past year as Disney has posted gradually worsening earnings.

Disney said Tuesday that its second-quarter earnings, for the period ending March 31, fell 41% to $226 million. While theme parks and broadcasting both showed higher results, the creative content division covering the studio and consumer products posted 52% lower operating income of $163 million.

Disney warned that while its second half would show an improvement, the upswing would not be enough to offset the decline in first half earnings.

When will it improve

The big question for investors now is when Disney will begin that upturn. As Schroders & Co. analyst David Londoner said in a note to clients, "The question in our minds is not whether investors should own Disney for the long term but when is the right time to get back in."

He added that, given the scheduled opening of Universal's Islands of Adventure theme park in Florida next month, which is expected to eat into Walt Disney World's business, "The timing is probably not right yet" to buy back in.

A company spokesman said Thursday that Disney had been investing heavily in expanding its theme park businesses around the world as well as adding related businesses like cruise ships, which will eventually start to contribute to earnings.

High hopes for DVDs

And while Disney has exhausted huge profits it generated from video releases of classic library titles in the 1990s, the company expects to make more money from its library once DVD usage becomes more common and consumers start replacing their homevideo collections with DVDs.

For the moment, analysts said, Disney stock will remain in the doldrums, although most note it is still trading at relatively high valuations compared to other media stocks. That reflects its well-known name and widespread ownership by individual investors, analysts said.