Personal Finance

Disney Dominated the Box Office in 2017

A scene from Beauty and the Beast.

Disney (NYSE: DIS) is getting comfortable in its perch on top of the studio entertainment industry. It finished 2016 as the top-grossing movie maker for the first time in over a decade. And the entertainment giant just made box-office magic happen again this past year.

A few late-season blockbusters allowed Disney to race ahead of Time Warner 's (NYSE: TWX) Warner Bros studio to capture over one-fifth of all ticket sales, or about $2.3 billion. By the time the numbers are finalized, Warner Bros will be comfortably behind in second place, with roughly $2 billion in receipts, according to Box Office Mojo.

Spinning theatrical magic

Disney achieved that happy result with far fewer films in 2017 -- 12 compared to Time Warner's 33. It helped that this small selection included the two top-grossing movies overall, Beauty & the Beast , which pulled in over $500 million in domestic receipts, and Star Wars: The Last Jedi , which was on track to pass that figure over the New Year's holiday weekend. Sure, Wonder Woman grossed over $400 million, but that film wasn't joined by big enough blockbusters to let Time Warner seriously compete with Disney for first place overall.

A scene from Beauty and the Beast.

Image source: Disney.

As usual, the market-thumping performance was a team effort from Disney's diverse collection of studios. Thor: Ragnarock and Guardians of the Galaxy Vol 2 , produced by Disney's Marvel studio, each pitched in over $300 million, while Coco and Cars 3 , from Pixar, together contributed $300 million. A new Pirates of The Caribbean title, by Disney Pictures, grossed nearly $200 million.

An even brighter 2018

Disney's movie business hasn't seemed impressive lately. In the fiscal year that ended in September, in fact, the segment booked an 11% sales decrease and a 13% decline in profits. That weakness contributed to Disney's reporting its first overall operating decline in seven years.

However, the studio slump had a lot to do with the quirky cadence of Disney's movie releases. After all, three of its biggest launches, Thor: Ragnarok , Star Wars: The Last Jedi , and Guardians of the Galaxy Vol. 2 , didn't make it into fiscal 2017 even though they were critical in pushing Disney into first place among studios for the calendar year. That also means the financial benefit from these films will really be felt in fiscal 2018.

A father and daughter eating popcorn at a theater.

Image source: Getty Images.

CEO Bob Iger and his team have an aggressive release schedule planned for the year that includes four Marvel movies, two Pixar launches, and the Star Wars film that's likely to keep setting records into 2018. That packed pipeline should help the studio business rebound from the prior year's unusual decline. Those improving results will likely combine with a healthy parks and resorts segment to offset weakness in Disney's core media segment and push overall sales and profits higher this year.

Looking further out, Disney's biggest financial gains tend to come in years following its successful theatrical outings as it incorporates the new intellectual property into its theme parks and television shows while selling and licensing toys and games around the popular brands. It's only just starting this process with prior-year hits like Finding Dory , Moana , and The Jungle Book, and 2017's Beauty & the Beastwill be no exception .

As for rivals like Time Warner, they might have just missed their last chance to knock Disney off of its top industry spot. Movie production from the 21st Century Fox (NASDAQ: FOX) studio, which in 2017 accounted for $1.3 billion in box office receipts and 12% of the industry haul, will begin lifting Disney's results as soon as its $52 billion merger closes, likely by June 2018.

Find out why Walt Disneyis one of the 10 best stocks to buy now

Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. (In fact, the newsletter they run, Motley Fool Stock Advisor, has tripled the market!*)

Tom and David just revealed their ten top stock picks for investors to buy right now. Walt Disney is on the list -- but there are nine others you may be overlooking.

Click here to get access to the full list!

*Stock Advisor returns as of December 4, 2017

Demitrios Kalogeropoulos owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool recommends Time Warner. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Personal Finance Videos

How Student Loan Refinancing Works

Though it may be a great way to lower monthly payments, not everyone understands the student loan refinancing process. NerdWallet explains it. For more, try our refinance calculator:

Nov 25, 2019

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More