Did the Hulk Bomb for Shareholders?

Did I read correctly? Did former Fool Steven Mallas just write that The Incredible Hulk, Marvel Entertainment's (NYSE: MVL  ) latest run at box-office gold, which exceeded industry expectations with a $54.5 million opening over the Father's Day weekend, is a ... bomb?

Yes. His rationale, posted on BloggingStocks:

The awful Hulk movie that was released back in 2003 grossed $62.1 million in its opening weekend. There's no way to spin this. We've had five years of inflation between that terrible flick and this new iteration. Simply put, it should have grossed at least $65/$70 million, especially on the heels of Iron Man. I'm a shareholder of Marvel, and I don't like the fact that the success of Marvel's first movie of the summer didn't synergize a little better with the angry green guy.

I have a big problem with Steven's thesis. Comparing this year's debut to what Hulk faced in 2003 seems to me a stretch. Here's a list of action flicks still showing at the time of each film's opening weekend:

Release Date

Hulk competitor

U.S. Box Office Take

May 2, 2003

X-2: X-Men United

$214.9 million

May 15, 2003

The Matrix Reloaded

$281.6 million

May 30, 2003

The Italian Job

$106.1 million

June 6, 2003

2 Fast 2 Furious

$127.2 million

June 13, 2003

Hollywood Homicide

$30.9 million

Source: Box Office Mojo.

Release Date

Incredible Hulk competitor

U.S. Box Office Take

May 2, 2008

Iron Man

$297.9 million (so far)

May 9, 2008

Speed Racer

$42.5 million (so far)

May 16, 2008

Narnia: Prince Caspian

$131.9 million (so far)

May 22, 2008

Indiana Jones - Crystal Skull

$276.5 million (so far)

Source: Box Office Mojo.

Two things to note here:

  1. Even though both films faced down a blockbuster -- The Matrix Reloaded for Hulk and the new Indiana Jones for The Incredible Hulk -- Ang Lee's version debuted on June 20, the weekend after Father's Day that year and more than a month after the Matrix sequel hit theaters. Indy's new adventure, by contrast, isn't yet a month old and is still drawing a decent audience.
  2. The Incredible Hulk's competition, though fewer, is bigger. Do the math. This year's crop has already produced $748.8 million in grosses, or $187.2 million per film. Hulk's competitors ended their run with $760.7 million, or $152.1 million each. Inflation alone can't explain away that gap.

To be fair, I should say that even I predicted a $70 million opening for the Hulkster's re-introduction. But that doesn't change the truth that The Incredible Hulk did, indeed, beat expectations. The Hollywood Reporter said the film would open "comfortably north" of $40 million before it bowed. $54.5 million qualifies, I think.

What's more, how can you call a film that fans and critics like more than the original a bomb? Behold:

Metrics

Incredible Hulk

Hulk

Total rating

66%

61%

Community rating

88%

45%

Top critic rating

63%

53%

Source: RottenTomatoes.com.

Take these numbers seriously, Fool. Marvel is like Disney's (NYSE: DIS  ) Pixar and Time Warner's (NYSE: TWX  ) Warner Brothers in that its top franchises have a history of earning 70% or more of their total box office take after the opening-weekend hype subsides. Fans help to provide the ensuing tailwind.

Finally, here's the box office record for Marvel films that opened to $50 million or better:

Film

Opening Weekend

U.S. Box Office Total

Spider-Man 3

$151.1 million

$336.5 million

Spider-Man

$114.8 million

$403.7 million

X-Men: The Last Stand

$102.8 million

$234.4 million

Iron Man

$98.6 million

$297.9 million

Spider-Man 2

$88.2 million

$373.6 million

X-2: X-Men United

$85.6 million

$214.9 million

Hulk

$62.1 million

$132.2 million

Fantastic Four: Rise of the Silver Surfer

$58.1 million

$131.9 million

Fantastic Four

$56.1 million

$154.7 million

X-Men

$54.5 million

$157.3 million

Source: Box Office Mojo.

Talk about good odds. Only two flicks -- the widely panned Hulk and last year's sequel to Fantastic Four -- have ever failed to reach $150 million after bowing for at least $50 million. That's why Viacom's (NYSE: VIA  ) Paramount Studios and News Corp.'s (NYSE: NWS  ) 20th Century Fox continue to show enthusiasm for Marvel's properties.

My son and I went to see The Incredible Hulk last night. I can see why fans love it. For me, it wasn't as well done as Iron Man. (The whole team really deserves a raise for that one.) But I really enjoyed the connection to the old TV series, Edward Norton's depiction of driven scientist Bruce Banner, and the notable comic relief provided by Tim Blake Nelson.

And, yeah, I loved it just as much as everyone else in the theater did when Lou Ferrigno voiced the green guy's signature "Hulk ... SMASH!" line on screen.

You call this film a bomb for shareholders, Steven? Only if it doesn't produce at least $150 million in grosses. Expect a public apology from me if it doesn't.

Fool contributor Tim Beyers had positions in Marvel shares and LEAP options at the time of publication. He still very much believes that the company, though officially a Stock Advisor selection like Disney and Time Warner, is the sort of multibagger in the making that he and his rebellious colleagues search for daily at Rule Breakers. Try either service risk-free for 30 days.

Don't make The Motley Fool's disclosure policy angry. You wouldn't like it when it's angry.


Read/Post Comments (5) | Recommend This Article (20)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 18, 2008, at 10:30 AM, Surge77 wrote:

    I think it's hard to compare one movie to another because of all the factors that affect the box office.

    The Incredible Hulk has an onslaught of new movies to contend with which will make $150 million a hard goal to attain.

    This week Get Smart and The Love Guru open. Next week Wall-E and Wanted open. The following week Hancock opens. The list goes on.

    Because there are so many 'blockbuster' movies releasing during the summer, most of them end up going one and done. Which is why opening weekend is so important and I think that was Steven's point.

    I would say a more reasonable target is $125 mil at the box office, IMHO.

    -Surge!

  • Report this Comment On June 19, 2008, at 1:08 AM, TheGarcipian wrote:

    Tim, I don't think you have to worry with a public apology because I expect The Incredible Hulk (TIH) to pull in between $150M and $165M when all is said and done. And to call the film a "bomb" without considering cross-ties from the marketing and licensing of action figures, promotional images, Hulk Meals, etc., I think Marvel will continue to rake in some good "green". Nicholas Yulico of TheStreet.com pegs the film as adding $0.60/share for every $10M over his then-estimate of $50M for opening weekend box office receipts. This figure only includes box office receipts (all other revenue from TIH will be gravy), so if TIH only reaches $125M, that's another $4.50 added to the share price. If TIH goes to $150M (which you and I think is more likely), then that'll add $6 to today's MVL price of $34.50, for a nice 17% gain from here. If Steven wants to call that a bomb, please have him forward me all his TNT, C4, and Marvel stock. :-) Fool on!

  • Report this Comment On June 19, 2008, at 2:45 PM, Hugobox wrote:

    I EXPECTED A WAY BETTER FLICK, THE HULK IT SELF WAS NOT ON THE SCREEN ENOUGH, NO WONDER IT'S DOING POORLY, IRON MAN WAS WAY A BETTER FLICK , YOU GENIOUSES IN HOLLYWOOD NEED TO GET IT TOGETHER ,WHO WAS THAT DIRECTOR , THERE WAS 20 TIMES MORE ACTION IN THE TRANSFORMER MOVIE,THAT'S THE KIND OF FLICK THE HULK NEEDS TO BE........

  • Report this Comment On June 23, 2008, at 2:58 PM, JesterWOCourt wrote:

    HUGOBOX... SMASH

  • Report this Comment On June 24, 2008, at 8:34 AM, Surge77 wrote:

    Garcipian... not to split hairs, but I believe Yulico said, "Essentially, each additional $10 million in domestic box, above the $50 million mark, adds about 60 cents in value."

    That HAS to take into account all other revenue!

    The film cost $150m to make, and likely another $30m+ to advertise. All paid for by Marvel through their new studio. I'm not sure how you would calculate it otherwise.

    In other news, after 10 days, The Incredible Hulk has brought in $97m domestically. So it looks like my $125m estimate was a bit conservative.

    Additionally, it's taken in $62m overseas. Not great, but not horrible.

    -Surge!

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