Wall St. sees ‘Pirates’ hauling in loot for Disney
Wall Street expects "Pirates of the Caribbean: Dead Man's Chest" to haul in plenty of box office booty for the Walt Disney Co <DIS.N>, performing at least as well as the $654 million worldwide treasure for the first "Pirates" film.
"Dead Man's Chest" opens in U.S. theaters on July 7, and expands around the globe in weeks ahead. Audience expectations are running high, which is a good sign for Disney because it has spent a reported $450 million to make "Dead Man's Chest" and an upcoming movie in its trilogy of "Pirates" films.
Beyond the movies, the company has updated its classic theme-park ride with likenesses of star Johnny Depp and other characters, and it expects to rake in tens of millions of dollars more in DVD, video and other product revenue.
Already, advance ticket sales are more than 20 times higher than 2003 surprise hit "Pirates of the Caribbean: The Curse of the Black Pearl," according to online seller MovieTickets.com.
Paul Dergarabedian, president of box-office tracking firm Exhibitor Relations Co. Inc. said the movie industry also has high hopes for "Dead Man's Chest."
"The buzz around the campfire in Hollywood is, 'Could this be the film to post the biggest opening weekend of all time?'" Dergarabedian said.
The holder of the record for the biggest opening weekend is Sony Pictures' "Spider-Man," which made its debut with $114.8 million in ticket sales in 2002.
Disney's studio division helped drive earnings growth for the company in late 2003 and early 2004 with the success of the theatrical and home-video sales for "Black Pearl" and "Finding Nemo," a joint release with Pixar Animation Studio.
But division revenue has been down the past four quarters, partly due to weak box-office results and film costs.
Analysts were looking to "Pirates" and Disney-Pixar release "Cars," which opened earlier in June, to drive studio-division revenue through the end of Disney's fiscal year, which closes on Sept. 30, and into the first half of fiscal 2007.
Although "Cars" got off to a slow start, all signs point to a strong opening for "Pirates."
TREASURE TO COME?
"We are really off the charts with comparison to the first 'Pirates'," Joel Cohen, vice president of business development for MovieTickets.com, said. "There is significantly more demand for this movie."
"Dead Man's Chest" also was tracking 12-times stronger than "Cars" at this point in the sales cycle, Cohen said.
To date, "Cars" has grossed $189.8 million in the U.S. and in a limited international release, according to box-office tracking firm, BoxOfficeMojo.com.
Sanders Morris Harris financial analyst David Miller said "Dead Man's Chest" should at least equal the global box office for "Black Pearl," and that doing so could add a half-cent to Disney's quarterly earnings.
"This is the last major (earnings) catalyst in the calendar year for Disney," Miller said. "But the real earnings accretion lies in home video this Christmas — that's the fiscal first quarter of '07."
Pali Research's Rich Greenfield has not made forecasts for "Dead Man's Chest" but said it is under pressure to perform. "Given the less than exciting results so far for 'Cars', it has stepped up the importance of 'Pirates'," he said.
The new movie tracks the adventures of pirate Captain Jack Sparrow, played by Johnny Depp, as he tries to avoid repaying a blood debt to the evil Davy Jones, ruler of the ocean depths and captain of the ghost ship, Flying Dutchman.
Skeptics ridiculed Disney and producer Jerry Bruckheimer for basing the first "Pirates" film on a theme park ride, but it took in $46.6 million its debut weekend and spent 12 weeks in the box office top 10.
Bruckheimer said that despite the cost, the films were "less risky because you have the expectation of a film that will draw a lot of people the first weekend."