Total tally puts Disney in the slow lane
Turns out “Cars” got off to a significantly slower start than Disney expected.
Actual grosses released Monday showed the pic took $60.1 million, almost 4% less than the studio’s $62.8 million estimate, indicating it had a weak Sunday.
That wasn’t the only “Cars”-related bad news the Mouse House got on Monday; its stock tumbled as opening-weekend estimates failed to reassure skeptics who think the Mouse overpaid for Pixar.
Shares closed down 1.5% at $28.90 — recovering from a sharper 3.5% dip earlier in the day. Disney’s the only showbiz stock in the Dow Jones Industrial Average, and its skid weighed on other media shares as well.
Pixar toons such as “The Incredibles” and “Finding Nemo” have typically done about as good or better on Sunday than on Friday, but “Cars” dipped from $19.7 million on Friday to $17.1 million Sunday.
While hardly disastrous, that could indicate word of mouth on the John Lasseter-helmed toon is softer than on previous Pixar pics, which could weaken its expected healthy legs throughout the summer.
Reviews for “Cars” were mostly positive, but not nearly as glowing as those for “Nemo” or “Incredibles.”
The $60.1 million take is well behind the $62.6 million opening of “Monsters, Inc.,” which the new toon had appeared to have just barely beat. Instead, “Cars” is now No. 4 out of Pixar’s seven toons for opening-weekend gross, the lowest since “Toy Story 2” in 1999.
Mouse acquired Pixar from Steve Jobs this year in a deal worth $7.4 billion.
Given the huge amount of stock it laid out, Disney badly needed “Cars” to work — for public relations as much as economics.
International and ancillary may be stellar, along with theme park attractions and possible sequels. Still, the initial perf makes it easier for critics to say Jobs sold at just the right time.
“Based on the recent performance of CGI films and its mixed reviews, the film could struggle to gross $230 million domestically,” said Banc of America analyst Doug Shapiro. “More significant, it also raises questions about the rationale for the Pixar deal and, as a result, raises a central question about the Disney bull case.”
Fox’s “Ice Age: The Meltdown” grossed $68 million in as many theaters its opening weekend, and Fox’s ani division Blue Sky Studios came cheap in comparison, one Wall Streeter noted. When Fox bought Blue Sky, however, it was an f/x house with no record in animation.
Disney was also hit as Citigroup analyst Jason Bazinet downgraded the stock to “hold” from “buy,” saying the shares had run up excessively in recent months. His note to clients, dated late Friday, hit the wires Monday morning with the weekend box office.
Disney shares may have been ripe for a pullback. The Mouse, under new chief exec Bob Iger, has been the top-performing big media stock this year. Wall Street likes Iger’s forward-looking focus on new distribution: He scored points for making ABC the first network to offer hit shows on iTunes. And for every investor who slammed the Pixar deal, there was another who liked it.
Goldman Sachs analyst and Disney fan Anthony Noto acknowledged “Cars” came in “slightly below a very high bar of expectations” but said “if the shares are weak on this mild underperformance, investors should add to positions.”