The film, released on July 3, cost about $400 million to make and market but has taken in only $175.6 million worldwide, roughly half of which goes to theater owners. While other studios have also had flops this summer, “The Lone Ranger” is by far the biggest: Disney on Tuesday said losses from the film would total $160 million to $190 million, depending on how well it does overseas.
For the fiscal third quarter that ended on June 29, prerelease marketing expenses for “The Lone Ranger” contributed to a 36 percent decline in operating income at Walt Disney Studios. That decline offset growth from Disney’s cable television and theme park units, and Disney reported an overall profit of $1.85 billion — essentially flat from the same period a year ago.
That profit translated to $1.01 a share. In the year-ago quarter, net income was $1.83 billion or $1.01 a share. Revenue climbed 4 percent, to $11.58 billion.
Speaking to analysts in a conference call, Robert A. Iger, Disney’s chief executive and chairman, did not point fingers at “The Lone Ranger,” starring Johnny Depp, directed by Gore Verbinski and produced by Jerry Bruckheimer.
“We still believe that a tent-pole strategy is a good strategy,” Mr. Iger said, referring to big-budget movies. “You still have to make really strong films.”
The full write-down for “The Lone Ranger” will be taken in the current quarter, the fourth in Disney’s fiscal year.
As usual, the Disney division that includes ESPN drove the company’s financial performance; operating income at the Media Networks unit rose 8 percent, to $2.3 billion. ESPN benefited from contractual rate increases from cable providers and higher advertising sales, although programming costs also climbed. In particular, ESPN had to pay more for Major League Baseball rights.
Even though the Easter holiday fell in a different quarter this year, operating income at Disney’s theme parks increased 9 percent, to $689 million. The company said growth came from higher spending at Walt Disney World in Florida and Disneyland in California, both of which set attendance records.
In addition to trouble at its live-action Disney movie label, the entertainment giant faced trouble in the gaming and broadcast television divisions.
As expected, Disney’s video game and Web unit continued to struggle before the release later this month of a major gaming initiative called Infinity. Interactive operating losses widened to $58 million from $42 million.
Operating income at the ABC broadcast network and a string of local television stations fell 21 percent, to $213 million, because of higher prime-time programming costs, lower sales of reruns and a decline in advertising revenue tied to a decline in ratings.
Mr. Iger said he is “bullish” on the new programs ABC plans to introduce in the fall, but added, “until the season unfolds, you can never quite tell.”
Article source: http://www.nytimes.com/2013/08/07/business/media/profit-flat-at-disney-as-espn-and-parks-smooth-setbacks-in-film.html?partner=rss&emc=rss