Disney CFO: Don't Compare 'Iron Man 3' to 'The Avengers'

Iron Man 3 Downey Injured - H 2013
Marvel Entertainment

Iron Man 3 Downey Injured - H 2013

Tony Stark's latest solo outing, coupled with marketing expenses for "The Lone Ranger," will lead to a decline in operating income at the film unit, Jay Rasulo says.

Shares of Walt Disney fell 2.4 percent Thursday after CFO Jay Rasulo suggested that some of Wall Street’s estimates might be too high, in large part because the film studio won’t perform as well in the third quarter this year compared to last year.

“I want to get something out of the way that is specific about Q3,” Rasulo said at the Nomura Media & Telecom Summit. The CFO then launched into compatibility items” that he mentioned during Disney’s latest earnings call but that “were a little bit complicated.”

Tops on the list was the film studio, where Iron Man 3 will probably generate $1.2 billion at the box office worldwide. Impressive, but $300 million shy of what The Avengers did a year ago.

Box Office Milestone: 'Iron Man 3' Hits $1 Billion Worldwide

“Obviously, we are thrilled with the outcome of Iron Man,” Rasulo said. “Normally, everybody would say, ‘that’s terrific,’ but remember, a year ago in Q3 … we released Avengers.”

Next, Rasulo said that a “big portion” of the marketing expense for Lone Ranger will occur in the third quarter, but that the July 4 release is a fourth-quarter movie in terms of generating revenue for Disney.

Iron Man 3 not measuring up to Avengers and the marketing expenses of Ranger have amounted to $150 million less in operating income for the film studio in the third quarter this year compared to last year, Rasulo said. 

Also impacting Disney’s results in the third quarter is $73 million less in net-deferred revenue at ESPN due to “the covenants and timing of our different deals," Rasulo explained. 

Theme parks also have $65 million worth of timing issues, he said, in part because the Easter holiday fell entirely in the third quarter last year though that wasn’t the case this year.

Shares of Disney fell $1.61 on Thursday to $64.65.