Walt Disney Co. (DIS) said Monday it will take a significant charge on its film studio operations in the second quarter due to the flop of its big budget science-fiction epic film 'John Carter' on the box office in the U.S. However, the film is pulling in plenty of foreign revenue to ensure that it's not a complete bust.
The company revealed in a statement that it expects the film to generate an operating loss of about $200 million during the second fiscal quarter ending March 31.
This is anticipated to lead to a studio segment operating loss of between $80 and $120 million for the second quarter, the company added. Meanwhile, the studio recorded an operating profit of $77 million in the second quarter of last year.
The film has raked in $184 million in global box-office sales, but is still well below analysts' expectations. Meanwhile, the film is said to have cost the company more than about $250 million to make and about $100 million to market it globally.
'John Carter' was expected to do well as its director, Andrew Stanton, had earlier directed two commercially successful films, Finding Nemo and Wall-E. John Carter is about a civil war-era soldier who finds himself inexplicably transported to the planet Mars and having to battle a variety of space aliens.
Disney's studio segment has now taken large write-downs for four consecutive years due to a poor performing movie each year. The movies in order of release are 'The Sorcerer's Apprentice', 'Prince of Persia: The Sands of Time', 'Mars Needs Moms', and now 'John Carter.
"As we look forward to the second half of the year, we are excited about the upcoming releases of The Avengers and Brave, which we believe have tremendous potential to drive value for the Studio and the rest of the company," the company noted in the statement.
DIS closed Monday's regular trading session at $43.44, up $0.25 or 0.58% on a volume of 6.39 million shares. In the past 52-week period, the stock has been trading in a range of $28.19 to $44.13.
by RTT Staff Writer
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