April 20, Rich Ross, Disney Studios' Chairman has resigned reportedly due to the John Carter disaster.
Disney’s (DIS, NYSE, 52 week range 28.19 – 44.13) “John Carter” movie was a bust on its opening weekend generating approximately $30 in box office sales. As comparison, “Dr. Seuss’ The Lorax” debuted the week before with over $70 million and on its second weekend it still beat out “John Carter” with over $30 million at the box office.
The screenplay for “John Carter” was based on Edgar Rice Burroughs’ (creator of Tarzan) sci-fi story, serialized in 1912. The movie was estimated to cost $250 million, with the ultimate price tag at about $350 million after marketing and distribution. At that cost, according to analysts, the movie needs to bring in globally at least $600 million to break even.
Due to the poor showing, it is expected that Disney will need to take to take a quarterly write-down between $100 million to $165 million. But even that has not deterred S&P’s media analyst Tuna Amobi from his “strong buy” rating on the stock, saying that investors have already factored in the movie’s failure. He has a price target of $48 per share.
Amobi goes on to say the silver lining is that Disney will go back to basics concentrating on their branded movies, theme parks and ESPN, which gave them strong results in their last quarterly earning report.
The New York Times compares the movie to Columbia Pictures famous flop “Ishtar” with Warren Beatty and Dustin Hoffman, two big names that couldn’t save that flick. Here in Hawaii we all remember “Waterworld,” Kevin Costner’s $250 million disaster that was filmed off the Kohala Coast.
Thomson/First Call shows that analysts are bullish and recommending either “hold,” “buy” or “strong buy.” They also are looking for earnings to increase to $3 per share for fiscal 2012 ending Sept. 31, compared to $2.54 in the prior year, and $3.40 for fiscal 2013. Disney has beaten earnings expectations the last three quarters by about 10 percent to the upside.
Bob Iger, Disney’s CEO admits that the movie was a “colossal miss” but he isn’t pointing any fingers. Rest assured that it will not be a franchised sequel as originally thought.
The next movie to watch out for is the “Hunger Games,” adapted from the three-book series by Suzanne Collins. They have already filmed all three episodes, similar to the “Lord of the Rings.” Will it live up to its hype?