Though Disney reported an otherwise fairly good performance, box office misfire Mars Needs Moms tainted the discussion on the company’s quarterly earnings call on Tuesday. The animated film, which cost $150 million but only earned $37 million worldwide, meant a 13 percent decline in studio entertainment revenue year over year, down to $1.3 billion, and a staggering 65 percent drop in profits.
CFO James Rasulo discussed what he called the "very disappointing performance" of Mars Needs Moms in relation to the formidable returns the company saw the year before, thanks to Alice in Wonderland and the latest installment in the Toy Story franchise. The successes of those two contributed to the year-over-year dip.
The company, however, is looking ahead to the summer season to jump start its film profits once again. With the upcoming releases of Pirates of the Caribbean: On Stranger Tides and Cars 2, Disney has dollar signs in its eyes. In the long term, the company views its acquisition of Marvel Entertainment as a "treasure trove of value," said Robert Iger, Disney’s president and CEO. And, Iger said, Disney is hoping to turn The Avengers, a movie scheduled for release in 2012 and based on the Marvel comic of the same name, "into a true franchise."
Disney reported overall quarterly profits of just over $9 billion, a 6 percent increase year over year. The company saw 17 percent growth in its cable networks revenue, up to $2.8 billion, thanks to a banner quarter for ESPN. The cable sports network had its highest rated second quarter ever, thanks in part to the highest rated NBA regular season ever, and generally performed well across all sporting broadcasts—"even cricket," Iger said.