Disney expects its partly animated and frequently panned Red Planet film John Carter to lose $200 million, throwing the whole movie division into a sea of red ink.
“In light of the theatrical performance of John Carter ($184 million global box office), we expect the film to generate an operating loss of approximately $200 million during our second fiscal quarter ending March 31,” Disney said in a statement after markets closed Monday.
“As a result, our current expectation is that the Studio segment will have an operating loss of between $80 and $120 million for the second quarter.”
The movie’s production budget is estimated at $250 million. Another $100 million was spent on marketing.
Disney said that John Carter has collected about $184 million in global ticket sales so far. However, ticket sales are split approximately in half with theater owners.
Made by Oscar-winning director Andrew Stanton in his first live-action effort, the movie drew scathing reviews from many critics upon its release earlier this month.
“While John Carter looks terrific and delivers its share of pulpy thrills, it also suffers from uneven pacing and occasionally incomprehensible plotting and characterization,” said the Rotten Tomatoes site, which also compiles film reviews. Associated Press movie critic Christy Lemire called it “massively confusing” and “deadly dull.”
The loss will more than overshadow means that profits from other movies and home video disc sales.
But Disney maintains that the loss can be reversed, thanks to such future projects as Pixar’s Brave, set for release June 22.
“As we look forward to the second half of the year, we are excited about… The Avengers and Brave, which we believe have tremendous potential to drive value for the Studio and the rest of the company,” the entertainment giant said.
Centering on a Civil War veteran who finds himself on Mars, John Carter is on its way to the “Red Ink Planet,” said Cowen & Co. analyst Doug Creutz. However, he predicts a write-down of about $100 million.
Disney’s projected loss is more than double what he had expected, said Miller Tabak analyst David Joyce, adding that this will reduce his estimate for Disney’s earnings. Because of the large spending on production and marketing, Disney is announcing the loss sooner than might be expected for for a smaller-budget film, he added: “It’s good that Disney’s airing their dirty laundry now.”
“Obviously no studio puts this much into a movie hoping for this kind of result,” said Hollywood.com analyst Paul Dergarabedian.
One estimate was that about $600 million in worldwide box office revenue was needed in order for Disney to break even on John Carter. However, fewer than 65 movies have reached that figure, Dergarabedian said.
Disney shares fell 43 cents Monday to 43.01 in extended trading. The stock closed up 25 cents at $43.44 in regular trading — before Disney’s announcement of the huge expected loss.