'Box Office Underperforms But Still Manages To Grow,' MKM Partners Says

In a report published Monday, MKM Partners analyst Eric Handler looked into the cinema industry, which continues to underperform forecasts but is still managing to deliver some growth.

The weekend's top 10 films grossed $103 million, $14 million below the firm’s $117 million forecast, but still up 9 percent year-over-year. According to the research note, weaker-than-expected results were largely due to underperformance from:

• "Fifty Shades of Grey" - Produced by Focus Features, a subsidiary of the Universal Pictures Division of NBCUniversal/Comcast Corporation (NASDAQ: CMCSA) (NASDAQ: CMCSK).
• "The SpongeBob Movie" – Produced by Paramount Animation, a Viacom Inc. (NASDAQ: VIA) company.
• "Hot Tub Time Machine 2" - Produced by Paramount Pictures and Metro-Goldwyn-Mayer (MGM).

Despite the lukewarm results, the box office remains strong. “A little more than half way through the quarter, the box office is up 10.2% and tracking nicely ahead of our flat outlook. While there are a few difficult comparison weekends in March, the box office appears well on its way to at least a mid-single digit increase in 1Q, if not high single-digit growth or higher.”

Another item of note: Jackie Chan’s "Dragon Blade," “paved the way in what has been a record start to the beginning of the Chinese New Year movie season. Dragon Blade has grossed $50mn in its first four days of release. No IMAX data has been published but we believe a 10% market share is a likely outcome.”