“Avatar. Waterway” failed to reverse the recent funk at Walt Disney Co., whose shares are on track for their worst year since 1974.
Disney shares DIS,
Monday fell nearly 5% to their lowest level since March 2020, after the blockbuster sequel and one of the most expensive films in Hollywood history missed a beat in its opening weekend. “Avatar. “Waterway” grossed $134 million domestically and had the second-biggest global opening of 2022, but failed to follow estimates based on advance US ticket sales and disappointed in one of the franchise’s biggest markets, China.
Disney was hoping to make a clean sweep in China, where the first film was a blockbuster in 2009. “Waterway” earned $57.1 million there, which Disney described in a Wall Street Journal report as disappointing but understandable.
“The problem is that nobody wants to go to the movies because they’ve been told that COVID is too dangerous,” Tony Chambers, Disney’s global head of theatrical distribution, said in the article. “Although the cinemas are open, there is really no appetite to go there.”
The news helped send Disney shares down 4.8% on Monday, the biggest drop of the day for the Dow Jones Industrial Average DJIA.
component, to $85.78, down two cents from Disney’s lowest closing price since 2014. Avatar’s less-than-stellar launch is just the latest setback for Disney shares, which have fallen 44.6% this year, putting them on their biggest annual pace yet. percentage decline since 1974, according to FactSet. The broader S&P 500 SPX index,
Down 19.9% in 2022 and the Dow down 9.9%.
Disney stock hit an all-time high of $200 per share in March 2021 after Chief Executive Bob Chapek touted Disney+’s early streaming success. Chapek was replaced by predecessor Robert Iger last month after Disney missed revenue expectations by about $1 billion in the fiscal fourth quarter and issued a disappointing forecast.
Read more. Disney shocker. Robert Iger will return as CEO, Bob Chapek was fired
Iger returns with some lowered targets. Disney is now worth $156 billion, down from more than $350 billion at its peak, and analysts have cut Disney’s revenue expectations for the new fiscal year by 20%. But “Avatar” ticket sales this month are expected to provide the biggest revenue of the year for Disney’s movie business, which missed sales expectations by about $300 million last quarter.