WALT DISNEY COMPANY (NYSE:DIS) APPEARS IN DOLDRUMS SINCE ITS LATEST FLICK PROVED UNSUCCESSFUL

Denver, CO, 07/08/2013 (Avauncer.com) – Shares of entertainment giant The Walt Disney Company (NYSE:DIS) gained 0.33% to close at $63.82 in its last trading session. The shares nevertheless remained close to their 52-week high of $67.89.

However, the company has suffered a setback on the box office, since its latest film ’The Lone Ranger’ could only generate $11.7 million since its release. The company estimates its weekend collections at around $45 million, approximately $20 million less than its expectations. The company spent $225 million, in addition to another $100 million to market the film. It expected to make a fortune out of the venture by casting the most coveted actor of Hollywood, Johnny Depp. The implications of this failure may be considered serious, as one bad box office is said to negatively affect the company’s bottom line. This is evident from the fact that last year, the company’s Studio Entertainment booked a $161 million loss on the film ‘John Carter’, making the whole sector unprofitable by $84 million for Disney’ssecond quarter in 2012. However, this film later managed to recover its investment. Therefore, it is still expected that ‘The Lone Ranger’ may make a comeback and help Disney recover at least its costs. However, the company left no stone unturned in making the film a success, by bringing together the trio of producer, director and protagonist who belonged to the highly successful series ‘Pirates of the Caribbean’.

These investments may not seem relevant though for a company with sales and profits of $42.3 and $5.7 billion respectively. Therefore, such mediocre returns not only reflect how flop this film has been, but also raise a question on the ability of the company in making a solid presence in the market.

Another film, ‘Despicable Me 2’ produced for only $76 million, was though a very successful film.