Analyst Calls 'Jack the Giant Slayer' Opening Weekend 'Quite Disappointing'
UPDATED: MKM's Eric Handler says a possible writedown on the film depends on its international performance and predicts a strong opening for Disney's "Oz the Great and Powerful."
Wall Street analysts commented Monday on the weak U.S. weekend box-office performance, including the sluggish opening of Bryan Singer's 3D fantasy-adventure Jack the Giant Slayer.
The film from Time Warner's New Line and Legendary Pictures -- with a price tag of nearly $300 million between the $195 million production budget and hefty marketing spend --- topped the U.S. box office with $27.2 million but is widely expected to need a good run abroad to make money. 3D tentpoles often can do much better overseas.
In a report entitled "Jack Not Much of a Giant Slayer," MKM Partners analyst Eric Handler said the movie outperformed his low $26 million estimate. And Lazard Capital Markets analyst Barton Crockett also said that its opening "was $6.8 million bigger than our dwarfish projection."
"But given a reported $195 million [production] budget, the opening was quite disappointing," Handler wrote. "A good, but not great, B+ CinemaScore might result in decent word-of-mouth, but next weekend’s release of Oz the Great and Powerful (which is reportedly tracking to open in excess of $70 million) is likely to capture the attention of many families and fantasy fans and, as a result, limit the shelf life of Jack."
Will Time Warner have to take a write-down on Giant Slayer? "I would think so," Handler tells The Hollywood Reporter. "It depends largely on how big the international box office turns out to be."
Others pointed out though that Warner shared the cost for the movie with Legendary, making a writedown less likely. Time Warner CEO Jeff Bewkes at an investor conference Monday didn't get a question about the film's performance. He highlighted the studio's strong profitability, which last year again saw it top all Hollywood studios in terms of operating profit.
Meanwhile, Warner Bros.' The Hobbit: An Unexpected Journey has also continued to do well and recently crossed the $1 billion revenue mark.
Analysts on Monday also highlighted the broader box-office weakness this weekend.
"Box office fell sharply this weekend, near our forecast, as the main hope to turn around a tough first quarter -- Disney's Oz the Great and Powerful -- looks set for a big opening next weekend," Crockett wrote.
"The box-office slump continues as new releases underwhelm," Handler echoed. "While box-office results were largely as expected, a 39 percent year-over-year decline (we projected a not-too-dissimilar 37 percent decrease) is hardly something to get excited about."
With the industry’s slump now extended to a sixth consecutive weekend of double-digit declines, "a lot is riding on next weekend’s release of Oz the Great and Powerful to regain some lost ground," Handler said. "For the first quarter, we are still projecting an 8 percent decline, although that outlook may end up proving a bit optimistic unless we see some strength from upcoming releases."
March, which last year saw a 38 percent box-office gain, provides the toughest monthly comparison this quarter and this year, according to analysts.
Crockett predicted for next weekend a 1 percent year-over-year increase in box office for the top 12 movies, "with the turn attributable to Oz, which we have in first with a $65.7 million opening en route to a domestic total of $200 million that would make it the biggest movie of the first quarter."
Handler, meanwhile, also discussed the performance of The Hobbit in its second full weekend in China, calling its 10-day gross of $37.3 million mediocre." He said: "While the film still has two weeks to run, it appears doubtful our $100 million total box-office projection for China will be achieved."