'John Carter' $200 million writedown prevents robust Q2
While “The Avengers” may be a blockbuster, Disney won’t be able to count much of that coin until its third quarter. Still that didn’t hold the Mouse House back from posting strong second quarter earnings, with revenue up 6% and profits 21%.It could have been higher had it not been for the $200 million writedown Disney is taking from the poor performance of “John Carter,” even overseas. Film has earned $279 million since early March. But strong advertising income at ABC and ESPN propped up results, as did theme park attendance during the three-month frame that ended March 31. Profits at the theme parks surged 53%. Overall, Disney earned $9.6 billion in revenue and $1.1 billion in profits. It’s the fifth quarter in a row that revenue is up and the fourth that Disney has increased profits. While the studio saw sales decline 12% to $1.1 billion, forcing the division to report a loss of $84 million. Disney typically turns to its film biz to launch new properties that it can exploit across the rest of the company’s divisions, but doesn’t rely on the studio to generate much of its coin. For example, TV and theme parks made up 87% of its operating income last year, the company said. But the Mouse House has been eager to take advantage of its $4 billion purchase of Marvel Entertainment in 2009. While “The Avengers” assembles auds in theaters, ABC is developing a TV show based on the Incredible Hulk that Guillermo del Toro will produce. Boy targeted cable channel Disney XD already shows “Avengers” toons. Its consumer products biz is benefitting from “The Avengers'” success, selling out of toys, especially for the Hulk — Hasbro alone is expected to generate $400 million from “Avengers”-related toy sales. Disney’s theme parks are developing new attractions based on Marvel characters that don’t appear at Universal’s Islands of Adventure park in Orlando, Fla. And online, a “Marvel: Avengers Alliance” game has attracted over 7 million paying players on Facebook. “It’s our hope that in a few places around the world, Marvel characters will appear either in attractions or lands or in some form to provide entertainment like our Disney characters do,” Disney chief Bob Iger recently told analysts. “The Avengers” is expected to boost Disney’s earnings again in the third quarter, especially after the film opened to $207 million, easily besting initial estimates of $150 million to $170 million. Because of its success, analysts expect pic to earn as much as $1.35 billion at the worldwide box office and put $250 million of profits in Disney’s profits once TV rights, homevid and consumer products are accounted for and Paramount and other partners are paid. “The Avengers” is now at $702 million worldwide. Disney’s stock showed gains on Tuesday, despite a mostly down market. Company’s stock price is up 18% this year and $3.84 since February 6, closing at $44.30 on Tuesday.