Ahead of the Bell: Disney earnings hurt by Scrooge

AP News
Posted: Nov 09, 2009 8:08 AM

Walt Disney Co.'s new version of "A Christmas Carol" got a Bah Humbug from Deutsche Bank, which predicts a disappointing $31 million in opening weekend ticket sales will lead to smaller quarterly profits.

The computer animated film, starring Jim Carrey as Ebenezer Scrooge, opened this weekend at No. 1, according to studio estimates Sunday.

But it measured well short of the $55.1 million opening for "Dr. Seuss' How the Grinch Stole Christmas," the holiday classic voiced by Carrey in 2000.

In a note to investors, Deutsche Bank's Doug Mitchelson estimated Disney will take a $50 million write-down based on the film's opening weekend and $200 million budget. He cut his earnings forecast for the company's fiscal fourth quarter to 2 cents per share from 40 cents per share. Disney reports earnings for the three months ended in September on Thursday.

Mitchelson said the good news is that the write-off will be taken at the end of the fiscal year, leaving a clean slate for 2010.

The weak release caps "a very disappointing year for Disney's film division," Mitchelson wrote. He cited a $50 million write-down for "G-Force" and the poorly timed release of "Confessions of a Shopaholic," a film about big spending that came out "in the midst of the recession."

Mitchelson said he expects a stronger 2010 with the planned release of "Alice in Wonderland" and "Toy Story 3."