Everyone knows the world is going to hell before our eyes, but it takes a phenomenally informed and intuitive individual to really put the scope of our misfortunes in perspective. Morgan Stanley analyst Benjamin Swinburne is probably not that individual.
Or maybe it's all the fault of The Hollywood Reporter, which positioned Swinburne's research note this week to Disney investors as an apples-to-apples matter when perhaps a disaster-stricken apples to cash-hemorrhaging lemons comparison would have been more appropriate:
The poor performance of Mars Needs Moms will wipe out only about 1% of Disney's earnings this fiscal year, but the earthquake and tsunami in Japan could hurt the company somewhat more, an analyst said Wednesday. [...] Swinburne figures the film, which cost $150 million to make and has collected a measly $8.6 million domestically since opening March 11, will cost Disney two or three cents per share in annual earnings.
The Japan catastrophe, though, could cost Disney a nickel or six cents per share. Mars and Japan together might destroy up to 3% of Disney's earnings unless gains at ESPN offset the bad news elsewhere.
The risks to Disney in Japan include film distribution and the Disney Stores there, as well as Tokyo Disneyland, which the company doesn't own but collects a license fee based on sales. In fiscal year 2010, the fee amounted to $240 million and accounted for 18% of operating income in Disney's parks' segment, Swinburne wrote.
I'm no economist or analyst or even so much as a casual day trader, but I definitely feel confident in saying everything happening in Japan right now is going to affect a global conglomerate's bottom line more dramatically than a $150 million bomb. I mean, it's not like a tsunami has a cable or home-video afterlife, right? And we don't have to pay a surcharge to watch the grim epic Fukushima Daiichi in 3-D. Anyway, Disney investors, don't despair: Pirates of the Caribbean 4 has to be worth at least five cents a share, right? Right?
ยท Japan Disaster Will Have Greater Financial Impact on Disney Than Mars Needs Moms [THR]