Wall Street Journal: Disney Beats Expectations With Q2 Earnings; John Carter losses have negligible effect

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Disney announced its first quarter earnings today, beating expectations with earnings of 63 cents per share (58 centers per share non-GAAP)  against analyst expectations in the 55-56 cents per share (non-GAAP)  range.   The studio division posted a loss of $84m, which is on the low end of the projected loss of 80-120m announced on March 20, when Disney announced it was writing down 200m against John Carter, which at that time was 10 days into its theatrical run.  John Carter currently stands at $270m in global box office gross, a respectable number, but insufficient due to the $250m production investment and $100m marketing investment.  (Studios typically get about 45% of Box Office Gross, so the John Carter tally to date, before DVD and other income, is approximately $125m net to Disney against investment of $350M).  Click to view full report.

Walt Disney Earnings Top Estimates

Following is the Wall Street Journal Report

Walt Disney’s earnings just hit the Tape, with earnings up 21% as strength at the company’s cable networks and theme parks offset a loss at its movie studio.

The company reported earnings of 63 cents a share, or $1.14 billion, on sales $9.63 billion in its fiscal second-quarter. The non-GAAP earnings were 58 cents a share.

That topped market consensus, which was for EPS of 56 cents a share (55 cents, non-GAAP), net of $998 million, on sales of $9.57 billion.

A year ago, the company earned $9.42 million, or 49 cents a share, on sales of $9.08 billion.

Shares are up 1.6% in late trading, at $44.82.

For the quarter, the company’s studio division posted a loss of $84 million; this is the group that had to absorb the “John Carter” write-down. But as Dow Jones’ William Launder wrote, the box-office flop hardly seemed to matter:

Disney’s studio loss isn’t quite as bad as the $120 million loss Disney warned it could reach back in March, due to dismal box office performance for “John Carter.” With second-quarter profit gaining 21% and “The Avengers” breaking new theater records, the studio loss is unlikely to get much more attention from investors. If that’s not enough, CEO Bob Iger tells CNBC that Disney will likely keep up its mix of shareholder-friendly buybacks and dividends.

Elsewhere, the parks and resorts unit saw the biggest boost to its profit, which rose to $222 million from $145 million last year.

The media networks division’s profit rose to $1.73 billion from $1.52 billion last year. Consumer products saw profit inch ahead, to $148 million from $142 million. The interactive media unit narrowed its loss from last year, to $70 million from $115 million.

Company’s hosting a conference call at 5 p.m. ET.

Read it at WSJ

5 comments

  • There should definitely be a sequel made of John Carter despite the crowd of elite boorish snobs who gave this great film a weak review – BTW I have read some great reviews and will try to find to post here – I thought the film was incredible and well done and have read posts by many fans who thought the same – my sister didn’t see the film based on the snob report of some local paper but when I purchased the DVD for her she loved it and said she would watch again and again !

    This film has heart and great characters in John and Deja not to mention the graphic characters – this should have been released in the Summer, the title should have been the Princess of Mars, and the trailers should have featured more of the princess and not the big white apes and more of the love story dialogue – the music was great too !

    A brief point on the flop predictions – even with these bone headed mistakes by the marketing team and Disney giving up too soon Wikipedia reports that the film has made about 280 million dollars to date and the DVDs and other sales are still ahead – even with terrible marketing this great film is predicted now to either break even or make a slight profit which is saying a lot with a combined expense of 350 million to produce and market John Carter ! 100 million of that wasted on the marketing team !

    I say Hooray for John Carter ! and to hades with the snob reviewers! Listen to the fans and do a sequel !

    Simply market the sequel better – you already have a core group of fans who will see it !

  • I have to agree with Abe here. If it the movie had stuck to the original June 8th release date Disney could have had the time to fix the marketing and would have had both The Avengers to run a great trailer in front of, had Battleship with Taylor Kitsch (even though that could still backfired if that film flops) and enough time to build up more press. It might have also gave Stanton enough time to fix that opening, remove the Therns and “that wife” (I’m trying Dotar!).

  • I’m partly relieved that the Avengers has shown up and taken the spotlight off of the John Carter debacle. And the Avengers will make enough money to help fund a John Carter sequel, if there is the will to make one among the Disney executives. There is certainly the will to see one among a passionate and growing fan-base!

    But, now I’m wondering if things might have turned out better if John Carter had followed The Avengers and had ridden its momentum for Disney/Marvel sci-fi. If John Carter had been released on its original date of June 9, the last month of its marketing could have capitalized off of the Disney/Marvel connection, which would have likely resulted in a much better opening weekend and thus much stronger and broader word of mouth that could have carried it a lot closer to profitability during its theatrical run, if not all the way out of the red. But we’ll never know for sure…

  • Hey using Avengers to advertise Dojar Sojat; that was my idea! You don’t dump summer block busters in off months. If they had put a trailer for John Carter at the end of the Avengers, and ran it in the summer where it belonged, it wouldn’t have tanked. It’s an Epic Blockbuster. It deserved a summber date. Isn’t that 315 million world wide gross when you include China and Japan? With the presale numbers, I think Disney is looking at a loss of around 0 – 30 million. The CGI is amazing.

    And 1 more thing: If I cost Disney 4 billion to buy Marvel, after a 3 billion dollar loss, wouldn’t that make the Avengers the biggest flop in history?

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