Walt Disney Co's Pearl Harbor is a box-office hit, though not as great a success as predicted by Chairman Michael Eisner when the World War II movie opened more than a month ago, analysts said.
Pearl Harbor, which cost an estimated US$135 million to make and another US$70 million to market, has sold US$160.4 million in tickets in four weeks in US and Canadian theaters and US$76.9 million in other markets. Sales will total more than US$200 million in North America by the end of the summer, said Chuck Viane, Disney's president of distribution.
Eisner had predicted that Pearl Harbor, which depicts Japan's attack on the US Navy in Hawaii in 1941, would be Disney's biggest non-animated film ever, surpassing The Sixth Sense, which grossed US$662 million worldwide.
PHOTO: BLOOMBERG
Some unfavorable reviews by critics and the film's length -- about three hours -- have discouraged multiple visits by moviegoers, analysts said.
"It's a little bit of a disappointment," said Harold Vogel, chief executive of Vogel Capital Inc, a New York investment company that specializes in the media and entertainment industry. "They really had a lot riding on this."
Pearl Harbor, released on the last weekend in May in the US and Canada, was directed by Michael Bay and produced by Jerry Bruckheimer, the team behind the action movies Armageddon and The Rock.
Before Pearl Harbor opened, Eisner sent a letter to employees of Burbank, California-based Disney.
"There are no sure things in the entertainment industry, but this comes close," Eisner said in the letter. "I've been telling anybody who would listen that this will be our biggest live-action film ever."
The Disney chief likely is regretting those words, Vogel said.
Dreamworks SKG co-founder Jeffrey Katzenberg, who had a widely reported falling-out with his former boss Eisner, couldn't be happier, Vogel said. Dreamworks' irreverent animated comedy Shrek already has grossed almost US$200 million in five weeks and is the season's top-selling movie so far.
"I'm sure [Katzenberg] has a wide smile on his face," Vogel said. "I don't doubt he's feeling pretty happy this summer." A movie's box-office sales are divided roughly 50-50 between the studio and the theater owner, so if Pearl Harbor sells US$200 million of tickets, Disney will receive about US$100 million in so-called rentals.
Because of the expense of producing and marketing Pearl Harbor, the studio likely won't turn a profit on the film until it's released on home video and later is licensed to cable and broadcast TV networks, analysts said. That will be in the first quarter of fiscal 2002.
Pearl Harbor will likely gross more than US$420 million in theaters worldwide and will generate US$200 million to US$240 million in cash flow after its release on home video, said Jordan Rohan, an analyst at Wit SoundView who has a "buy" rating on Disney shares. That would add about US$0.06 a share to Disney's earnings. Cash flow is earnings before interest, taxes, depreciation and amortization.
Disney shares fell US$0.18 to US$28.85 yesterday. They've dropped 13 percent since May 24, the day before Pearl Harbor opened.
"The film will eke out a nice profit for Disney," said Sutro & Co analyst David Miller, who has a "buy" rating on the stock. "We think that Pearl Harbor could contribute US$0.02 to US$0.04 once it's pushed through all ancillary" markets such as home video and TV.
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