Disney projects up to US$190m Lone Ranger loss
Walt Disney expects to lose between US$160 million and US$190 million on its expensive summer movie bomb The Lone Ranger, the media giant said on Tuesday as it reported a small gain in quarterly profit that beat Wall Street forecasts.
The loss for The Lone Ranger, a Western starring Johnny Depp, will be recorded for the quarter that ends in September, chief financial officer Jay Rasulo said on a conference call with analysts.
Disney shares dropped 1.9 per cent in after-hours trading to US$65.79 from a US$67.05 close on the New York Stock Exchange.
Lone Ranger opened July 3 with a dismal US$29 million in US and Canadian ticket sales over its first weekend.
“There has been a lot said, I know, about the risk of basically high cost, tentpole films,” Disney chief executive Bob Iger said, “and we certainly can attest to that given what happened with Lone Ranger.”
“We still think the tentpole strategy is a good strategy,” he said. “That one way to rise above the din and the competition is with a big film, not just big budget, but big story, big cast, big marketing behind it.”
For the quarter that ended in June, operating income at Disney’s film studio declined 36 per cent as hit film Iron Man 3 failed to match the spectacular success of last year’s The Avengers.
Overall, net income for the quarter rose 1 per cent to US$1.85 billion. Adjusted earnings-per-share reached US$1.03, beating the US$1.01 average forecast from analysts polled by Thomson Reuters I/B/E/S.
Operating income increased at the company’s theme parks and its media networks division, which operates sports channel ESPN.
“Overall it was a decent quarter, but nothing to get excited about,” Wunderlich Securities analyst Matt Harrigan said.
A gain in fees and advertising revenue at ESPN helped lift operating income at Disney’s media networks by 8 per cent to US$2.3 billion for the quarter.
At the parks unit, operating income increased 9 per cent to US$689 million as more people visited Disney’s theme parks in Florida and California.
The interactive gaming unit posted a loss of US$58 million. The company is counting on the August 18 release of its Infinity game to turn the unit profitable.