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'Wall-E' not a factor on Wall St.

July 01, 2008|Josh Friedman | Times Staff Writer

Where is the love for "Wall-E"?

The animated, futuristic adventure about a lonely, love-struck robot opened to rave reviews and topped the weekend box office with $63.1 million in domestic ticket sales -- the ninth straight No. 1 launch for Walt Disney Co.'s Pixar studio.

But stock market investors gave Disney shares the cold shoulder Monday, bidding them down 37 cents to $31.20.

Part of the problem is that "Wall-E," which 97% of critics endorsed, according to RottenTomatoes.com, "was successful but wasn't 'Nemo'-like" in its opening, said Richard Greenfield, an analyst at Pali Research. "Finding Nemo" and "The Incredibles," Pixar's two biggest movies, each opened to slightly above $70 million.

What's more, Disney got off to a slow start this summer when its highly anticipated sequel, "The Chronicles of Narnia: Prince Caspian," fell short of lofty expectations. The first film in the series from Disney and Walden Media, November 2005's "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe," grossed $292 million domestically, but "Prince Caspian" has hauled in only about $138 million since its May 16 release.

"And in case you haven't noticed, the entire media sector is melting down," added Greenfield, referring to the stocks. The Bloomberg-Hollywood Reporter index of 39 media issues dipped Monday to a fresh five-year low. Disney has held up better than many of its peers; the stock is off 3.3% year to date, compared with a 30% plunge in Viacom Inc. shares and a 10.4% drop in Time Warner Inc.

While shares of Disney rival DreamWorks Animation SKG Inc. often are affected by its two feature releases each year, even a Pixar movie is unlikely to move the revenue needle much at a diversified media conglomerate like Disney.

Studio entertainment generates about 15% of the company's operating income, while Disney's theme parks and TV networks generate significantly larger portions, notes analyst David W. Miller at SMH Capital.

"The broader concern for Disney shareholders is how well are the theme parks going to hold up in this economy," Miller said.

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josh.friedman@latimes.com

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