Disney’s `Wall-E,’ Garbage Robot, May Spur U.S. Sales
June 29th, 2008
Wall-E,” the movie about a trash- compacting robot, may end a slide in U.S. box-office sales for Walt Disney Co. and its Pixar animation studio.The film, opening in about 4,000 theaters today, probably will exceed Pixar’s 2007 release “Ratatouille,” which garnered $47 million in its first weekend, according to Steve Mason, an analyst in Los Angeles at FantasyMoguls.com, a box-office Web site. He estimated weekend sales of $55 million.
Disney, which bought Pixar in 2006, needs a hit to climb from last place among the largest studios in 2008 U.S. sales.The Chronicles of Narnia: Prince Caspian” missed Box Office Mojo LLC’s $86.9 million estimate last month, taking in $55 million in its opening weekend. Through June 22, Disney’s domestic ticket sales dropped 36 percent to $457.4 million, according to the Burbank, California-based film tracker.
Wall-E’ translates well around the world because of the physical comedy and emotional aspects,” Mark Zoradi, president of Walt Disney Studios Motion Pictures Group, said in an interview. “Nothing binds it to the United States. It’s a creative project that will work in 100 countries around the world.”
The movie from “Finding Nemo” creator Andrew Stanton follows Wall-E, short for Waste Allocation Load Lifter Earth- Class, who clears garbage left by humans who fled the planet to live on space ships. He falls in love with another robot, Eve, the Extra-terrestrial Vegetation Evaluator sent to Earth to look for signs of life.
`Love Story’
The film may take in as much as $210 million in ticket sales during its U.S. run, said David Joyce, an analyst at Miller Tabak & Co. in New York, who recommends shares of Burbank, California-based Disney and doesn’t own them. That would pass the $206 million of “Ratatouille,” according to Internet Movie Database Inc., a unit of Amazon.com Inc. that provides film data.
Wall-E’ boasts the best love story I’ve seen in 2008,” said Gitesh Pandya, editor of industry newsletter BoxOfficeGuru.com in New York. “Word of mouth will be terrific with all ages and this will last a long time.”
Disney, the second-largest U.S. media company, rose 4 cents to $31.57 at 4 p.m. in New York Stock Exchange composite trading. The shares have slipped 2.2 percent this year, compared with a 13 percent drop in the S&P 500 Index.
2003 Peak
Since 2003’s Finding Nemo,” the No. 2 animated film of all time according to Box Office Mojo, each Pixar release has produced lower U.S. box-office sales, a benchmark for subsequent sales of DVDs and television revenue.
U.S. box office is the most important factor in anticipating all the other ancillary revenue streams,” said David Davis, founder of Arpeggio Partners LLC, a Santa Monica, California-based consultant to Hollywood studios. “It’s not the only factor, but it’s the best indicator.”
U.S. box-office sales for Pixar, which Disney bought for $8.06 billion, peaked in 2003 with “Finding Nemo,” which was produced for $94 million and took in $340 million, according to Internet Movie Database.Ratatouille” cost $150 million, while “Wall-E” cost $120 million, IMDB said.
The jury is still out” on the Pixar purchase, said Tuna Amobi, an analyst at Standard & Poor’s in New York who recommends Disney shares and doesn’t own them. “It was a hefty price, no doubt about it. Disney is looking at it as a marathon, not a sprint.”
Fewer Films
Since buying Pixar, Disney has cut film production overall, betting it could boost profit by making fewer, more popular movies. Last year, filmed entertainment generated profit of $1.2 billion, a sixfold increase over two years, on slightly lower sales of $7.49 billion.
The company produced 13 films last year, down from 17 in 2005, and will release 11 in 2008.
This year is proving tougher. Through the first half of fiscal 2008, studio profit rose 6.5 percent to $891 million, while sales gained 6.7 percent to $4.46 billion. For the year ending in September, the unit’s profit is likely to fall 1 percent to $1.19 billion, as sales dip 1.8 percent to $7.36 billion, according to Michael Nathanson, an analyst with Sanford C. Bernstein & Co. in New York.
Robert Iger, Disney’s chief executive officer, said last month at an investor conference that Hollywood makes too many movies.
It shouldn’t surprise anybody in the business why there is so much failure and why the returns on investment are so modest,” Iger said.
The following table ranks Pixar movies by their worldwide box-office sales. Figures are in millions of dollars.
Movie Year Budget U.S. Worldwide
Total Total
Finding Nemo 2003 $94 $340 $865
Incredibles 2004 92 261 631
Ratatouille 2007 150 206 621
Monsters Inc. 2001 115 256 525
Toy Story 2 1999 90 246 485
Cars 2006 120 244 462
Bug’s Life 1998 45 163 363
Toy Story 1995 30 192 362

