The animated movie, the first Pixar film to be released by Disney since last month's $7.4 billion acquisition of the studio, was No. 1 at the box office this past weekend, grossing $62.8 million. But analysts were looking for a number north of $70 million. Disney shares fell 3%.
Several Wall Street analysts who cover Disney had expected the film to at least match previous Pixar releases. Finding Nemo and The Incredibles made $70.3 million and $70.5 million, respectively, their first weekend.
In a note Monday, Merrill Lynch analyst Jessica Reif Cohen calls Cars' opening weekend a disappointment."Cars opened to 'only' $62.8 million, below expectations of $70-$80mn and suggesting domestic box office of $200-$250mn versus our previous estimate of $270mn," she writes. Cohen notes that the impact on Disney from an earnings per share perspective is likely to be small -- to the tune of 3 or 4 cents between full year 2006 and 2007 combined -- but adds that the weak showing could hurt sentiment. One problem for Cars is that coming weekends are likely to produce a serious traffic jam at theaters in coming weeks. Several big releases are dueleading up to the Fourth of July weekend, most notably Warner Brothers' Superman Returns on June 28. Apart from the competitive landscape in coming weeks, Cohen notes that the film may not draw the young girls who enjoyed Pixar films in the past. She also noted that "recent trends suggest increasing compression of box office receipts in the first several weeks of release." Merrill does business with Disney.