Disney (DIS) Stock Falling on Weak 'Tomorrowland' Box Office Sales

NEW YORK (TheStreet) -- Shares of The Walt Disney Co. (DIS) are falling 0.79% to $109.39 after Disney's new sci-fi film "Tomorrowland" fell short of expectations, pulling in $41.7 million when it was expected to open at $50 million, the Los Angeles Times reported.

The company hopes "Tomorrowland" will perform better with families in the coming weeks, as Hollywood won't be coming out with any PG-rated movies until Disney's own "Inside Out" comes out on June 19, Disney's executive VP of distribution Dave Hollis said, according to The Wall Street Journal.

The film featured a rare attempt by the company to spend big money-$180 million in this case-on a movie that didn't feature characters or a fictional world already well known to audiences, the Journal said.

Although Disney's new film finished first as the highest-earning film for this past weekend, this was weak compared to last year, when Twenty-First Century Fox (FOX)'s "X-Men: Days of Future Past" grossed $110.6 million on Memorial Day weekend, according to the Journal.

Overall, this Memorial Day weekend brought in the lowest sales at the box office since 2001.

Hollywood pulled in roughly $190 million between Friday and Monday, according to Rentrak (RENT), a global media measurement and research company serving the entertainment industry, the lowest since 2001, especially since average ticket prices have increased 44% over that time period.

Finishing second was Comcast's (CMCSA) Universal Studios Pitch Perfect 2 which grossed $37.9 million.

TheStreet Ratings team rates DISNEY (WALT) CO as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate DISNEY (WALT) CO (DIS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, notable return on equity and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • DIS's revenue growth has slightly outpaced the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 7.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • DISNEY (WALT) CO has improved earnings per share by 13.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DISNEY (WALT) CO increased its bottom line by earning $4.25 versus $3.38 in the prior year. This year, the market expects an improvement in earnings ($5.08 versus $4.25).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Media industry average. The net income increased by 10.0% when compared to the same quarter one year prior, going from $1,917.00 million to $2,108.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Media industry and the overall market, DISNEY (WALT) CO's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • Net operating cash flow has increased to $2,918.00 million or 15.47% when compared to the same quarter last year. In addition, DISNEY (WALT) CO has also modestly surpassed the industry average cash flow growth rate of 15.28%.
  • You can view the full analysis from the report here: DIS Ratings Report

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