Disney shares drop on weak "cars" sales

[crazy4wdw]

WEAK 'CARS' SALES
Disney shares drop, the movie earned $60.1 million in its first weekend, short of the expected $72 million.

By Alex Armitage | Bloomberg News
Posted June 13, 2006

Walt Disney Co. shares fell 1.5 percent after the film Cars missed estimates for ticket sales in its first weekend and an analyst cut his rating on the stock.

Disney, the second-biggest U.S. media company, lost 43 cents to close at $28.90 on the New York Stock Exchange. Shares were down as much as 3 percent during the session.

Cars is the first film from the company's Pixar unit since Disney completed the purchase of the animation studio last month.

The movie brought in $60.1 million in ticket sales, Exhibitor Relations Co. said Monday, compared with the average $72 million estimated by five analysts surveyed by Bloomberg News.

The $60.1 million sales figure for Cars was less than Disney's estimate of $62.8 million on Sunday, which included projected ticket sales for Sunday.

Cars also fell short of opening weekend sales for three other Pixar films: The Incredibles, at $70.5 million in November 2004; Finding Nemo, at $70.3 million in May 2003, and Monsters, Inc. at $62.6 million in November 2001.

Separately, Citigroup Inc. analyst Jason Bazinet cut his rating on Disney to "hold" from "buy" on expectations for lower theme-park attendance in 2007.

Bazinet estimated that in 2007, the company will earn 11 cents less than the $1.64 per share average of 22 analysts surveyed by Thomson Financial.

Soleil Securities analyst Laura Martin raised her 12-month stock-price forecast to $35 from $32 because of strength at Disney's ABC television network and in the company's theme parks. The analyst advised investors to buy the stock on "weakness" in the shares in the wake of the release of Cars.

Time Warner Inc. is the biggest U.S. media company.

 

[yensiD naF]

This story reaks of Ei$ner. Only $60 mil? Throw in the towel. This company is done. Does ths mean Disney will now sell Pixar to Universal and there won't be a "Cars" attraction at a park?

If Walt could dream then why can't I?

 

[ptrbryant]

You know, I recently invested in Disney stock and "Cars" was hardly the main reason...bigger reasons were that Iger's in, Eisner's out; POTC 2 and 3 and, this time, there's actually merchandise tied into it; noticeable increase in park attendance and indications of longer stays; Pixar in general. I'm sure many companies would love to have such a "failure" as "Cars" making "only" $60+ million opening weekend.
My only regret is that I don't have any free funds right now to take advantage of the price today.

Karla B.

 

[Geyser Gazer]

Considering what the market has been doing lately, a 1.5% drop in stock may not be that bad.

 

[SoCalKDG]

"Disney's decision to postpone the release of Cars from November -- when previous Pixar movies have been released -- to June -- when schools are out -- could result in offsetting what analysts have called a disappointing weekend opening. On Monday, the film earned $6,445,000 -- far above the $3,802,000 that The Incredibles, the last Pixar release, earned on its first Monday in November, 2004. Likewise on Tuesday, Cars took in $5,820,000 versus $3,213,000 for the first Tuesday of The Incredibles. While initial reports had noted that the $60.1 million that Cars earned last weekend was well below the $70 million that analysts had expected, the film could exceed the gross for the first week of The Incredibles, Pixar's biggest hit, going into next weekend if mid-week ticket sales continue at the same clip. " IMDB


By Friday both Incredibles and Cars will have grossed the same amount for its first 7 days.

By the way, the "analyst cut his rating on the stock" was what most financial papers used for their report and headline.

 

[seashoreCM]

One movie had that much impact on the stock price?

Disney hints:
http://members.aol.com/ajaynejr/disney.htm