Despite “John Carter” Loss, Disney Has Strong Q2Tuesday, May 8, 2012
Second-quarter earnings revealed just how big a financial hit the science fiction film “John Carter” cost The Walt Disney Co.
The film’s lackluster box office results led to a 12 percent decrease in revenue for the studio entertainment division of the Burbank-based entertainment and media company.
Studio entertainment brought in $1.2 billion in revenue for the quarter ending March 31 compared to the $1.3 billion from the same period in the prior year. The division took an $84 million loss in operating income for the quarter.
Disney took a writedown on “John Carter”, a film based on the book series by Edgar Rice Burroughs, and its poor performance was followed by the dismissal of Rich Ross as chairman of Walt Disney Studios. Ross had been appointed chairman in October 2009.
The other four business units of Disney – media networks, consumer products, parks and resorts, and interactive media – finished positive for the quarter.
Overall, the company reported net income of $1.143 billion, or $0.63 per diluted share, on revenues of $9.6 billion. That is a 21 percent increase from the net income of $942 million, or $0.49 per diluted share, on revenue of $9 billion.
During the quarter, Disney increased its capital expenditures by 17 percent to $2.1 billion from $1.8 billion with spending to expand Walt Disney World Resort and Disneyland Paris. Capital expenditures also went to the construction of Shanghai Disney Resort. Back home at the Burbank headquarters, the company invested in both facilities and information technology.
Earnings for the third quarter are likely to be driven by the strong performance of “The Avengers,” the action hero movie that brought in $200 million in domestic box office in its first weekend.
Mark R. Madler