‘Mars Needs Moms’ drags down Disney’s earnings


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The box-office bomb that was ‘Mars Needs Moms’ left collateral damage on Walt Disney Studios’ bottom line, causing the film group’s performance to lag in its second quarter.

The studio recorded operating income of $77 million for the three months ended April 2 -- a 65% drop from the same time a year earlier, when it released the blockbuster ‘Alice In Wonderland.’ Disney said the poor theatrical performance of ‘Mars Needs Moms’ caused it to take a higher film write-down in the quarter. The 3-D animated movie that Disney spent $150 million to produce and tens of millions more to market managed just $36.7 million in global ticket sales.


Disney Chief Financial Officer Jay Rasulo said ‘Mars Needs Moms’ was ‘very disappointing’ and reduced the studio’s income by $70 million in the quarter.

Disney already has taken a loss on closing Robert Zemeckis’ special-effects operation in Marin County, ImageMovers Digital, whose motion-capture technology was used to create ‘Mars Needs Moms’ and ‘A Christmas Carol.’ Disney also has deep-sixed a planned Zemeckis project, ‘Yellow Submarine,’ a retelling of the Beatles cartoon.

The Walt Disney Co. reported net income of $942 million, down 1% from a year ago. Revenue rose 6% to $9.1 billion, from $8.6 billion in the comparable quarter.

Disney’s media networks group, which includes its broadcast and cable TV holdings, continues to buoy the company’s results. Operating income rose 17% to $1.5 billion, thanks to a bump in advertising revenue at ESPN and gains in subscribers and fees for Disney Channels Worldwide. The broadcast group also saw ad gains for the ABC network and its TV stations.

The Tokyo earthquake and tsunami impacted results for Disney’s parks group, which reported a 3% drop in operating income to $145 million. The March disaster forced the temporary closure of the Tokyo Disney Resort. Promotions around the January launch of Disney’s third cruise ship, Disney Dream, together with higher fuel costs, also dragged on results.

Disney’s interactive group’s losses deepened in the quarter, compared with a year earlier. The group reported a loss of $115 million, which it attributed to accounting for its Playdom acquisition, as well as costs associated with developing games for mobile devices and online.

For the film studio, ‘Mars Needs Moms’ was the second box-office disappointment in the last two months.

‘Prom,’ a modestly budgeted film that cost $9 million to make, opened April 29 to a paltry $4.7 million in domestic ticket sales. Its business dropped off 53% last weekend. The results fell well short of the studio’s initial projections for the movie about high school’s big night, according to two people with knowledge of the matter. ‘Prom’ was the first original film project to be given the go-ahead for production by studio Chairman Rich Ross.

The results from ‘Prom’ will be included in Disney’s next quarterly report.

Wall Street investors seem largely unconcerned about the performance of Disney Studios given the potential strength of its summer movie lineup. ‘Pirates of the Caribbean: On Stranger Tides,’ the fourth installment of the popular series, is expected to be the first of the summer movies to open with more than $100 million in ticket sales on May 20. That release will be followed on June 24 by Pixar Animation Studios’ highly anticipated sequel ‘Cars 2.’

-- Dawn C. Chmielewski