Here's Why Disney's Recent Box Office Bombs Really Shouldn't Matter Much to Investors
The company's other units produce much more revenue and operating income than the movie studio arm.
It's been a rough past few months for Walt Disney's (NYSE: DIS) film business. For instance, while February's release of Captain America: Brave New World produced a respectable $414 million in ticket sales, that's far from the billion-dollar box office that many Marvel movies have generated. Some fear that result was an indication of action-movie fatigue, which could prove devastating to a studio that also owns the Star Wars franchise.
Then there was March's disastrous release of Snow White. Although the live-action remake of the beloved 1937 animated film was ballyhooed and well-promoted, its $200 million worldwide take doesn't even cover the studio's estimated cost to make the movie. It would also be naïve to pretend this particular film's weak showing wasn't in part a reflection of a larger shift in the sociocultural dynamic that may not abate anytime soon.
Walt Disney shareholders have seemingly paid the price for its film unit's recent struggles. Shortly after shares' mid-November post-earnings surge, the sellers went back to work and didn't let up until they had dragged Disney stock to a new multimonth low in April. Shares have partially bounced back since then, but a prolonged recovery remains in doubt. The market may be waiting for whatever clarity the company's upcoming quarterly earnings report might offer.
