After rounding up just under $14 million at the box office, Walt Disney Co. could be forced to take a write-down on its barnyard animated tale "Home on the Range."
The movie, which cost more than $100 million to make, came in at fourth place over the weekend, behind "Scooby-Doo 2," "Walking Tall" and "Hellboy."
It "was a very disappointing weekend" for "Home on the Range," said Jordan Rohan, an analyst with Schwab SoundView who has an "outperform" rating on the Disney stock.
Although Wall Street was hardly counting on another "Lion King," some analysts said the tepid premiere for "Home on the Range" put further pressure on the Disney studio to bring home the bacon for the Burbank entertainment giant.
The studio's financial showing is crucial this year because Disney and its chief executive, Michael Eisner, have promised double-digit earnings growth to its increasingly restless investors. Eisner was forced to give up the chairman's job last month after shareholders delivered a 43% vote of no-confidence in his management. Critics have called particular attention to Disney's struggling divisions, including animation.
After a record year in 2003, the Disney studio has fared poorly with two other recent releases, "Hidalgo" and "The Ladykillers." Of even greater interest to investors will be the performance of "The Alamo," an expensive historical drama that hits theaters Friday. It was originally set to be released at Christmas but was delayed because the studio said the film wasn't ready.
If the numbers for "Home on the Range" don't improve, Disney could be forced to write down as much as $100 million in production and marketing costs in the second quarter, Rohan said.
Another analyst, Tom Wolzien, with Sanford C. Bernstein & Co, said: "Anybody who would anticipate a rapid recovery in the animation product at Disney needs to wait a while longer."
Dennis Rice, a spokesman for Walt Disney Studios, said the company was "pleased with the opening." He predicted the movie would do well over the Easter weekend and cited favorable results from Cinemascope, which tracks audience reaction.
Rice noted that Disney's "The Emperor's New Groove," which opened to $9.8 million at the box office in 2000, went on to make $89.3 million.
"It's way, way too early to talk about the financial future of the movie," Rice said. "We're not ready to put a nail in the coffin."
Some analysts agreed and said it was too early to predict such a large write-down. Moreover, they said, strong DVD sales from last year's hits "Finding Nemo" and "Pirates of the Caribbean" will offset any losses.
"I definitely think it's disappointing, but it's a little too early to jump to conclusions," said Richard Greenfield of Fulcrum Global Partners. "We'll have a lot better idea next Monday."
Smith Barney analyst Jill Krutick said in a research report that "we do not expect the film will be a major write-off." She added that Disney's animated films tended to do well overseas, citing "Brother Bear," which made $19 million in its premiere and went on to gross $215 million worldwide.
Disney can ill afford another setback in feature animation, the medium it pioneered.
The once-storied division has come under fire in recent years for its spotty record, which included the box-office flops "Atlantis" and "Treasure Planet," for which the company was forced to take an estimated $74-million write-down. In the last three years, the division laid off more than 1,000 workers in an effort to reduce costs and transition into the new world of digital animation.
Although the studio says it hasn't given up traditional animation, "Home on the Range" -- a comedy about happy farm animals hunting for an outlaw -- was the last fully 2-D feature film in the company's pipeline.
The pressure to succeed has intensified since Disney split with Pixar Animation Studios, the leader in computer animation behind the "Toy Story" and "Finding Nemo" hits, in a dispute over business terms. The relationship ends after Pixar gives Disney two more digital films.
Even so, Disney executives have touted their own animation capabilities.
As for "Home on the Range," Wolzien said, "this apparently is not the start of the solution to Pixar."