Showing posts with label Flying. Show all posts
Showing posts with label Flying. Show all posts

Monday, September 1, 2014

'How to Train Your Dragon 2': Flying high globally, clipped wings in U.S.--so, was it a hit?

It was a rough summer at the box office, with the industry trailing 2013’s record-breaking season by nearly 15 percent and selling the fewest tickets in more than 20 years. There were winners and losers, pleasant surprises and stinkers, but as the analysts push films in one column or the other, what to make of How to Train Your Dragon 2? It’s the year’s second-biggest animated hit (behind The LEGO Movie) and a likely Oscar nominee for Best Animated Film. And yet DreamWorks Animation sequel, distributed by 20th Century Fox, is the rare critical success to gross $172 million and feel like a disappointment. What else to call a sequel that makes $45 million less than its predecessor and $196 million less than last summer’s top animated film, Despicable Me 2?

And yet. How to Train Your Dragon 2, written off in July for its underwhelming box-office in the U.S., is now an enormous international blockbuster, with upwards of $413 million and counting. By the time its international run is complete, Dragons 2 might double the foreign take of the franchise’s original film ($277 million). Hiccup’s second cinematic adventure, which reunites him with his long-lost mother (voiced by Cate Blanchett) and pits the dragon-riding Vikings against a power-mad dragon slaver named Drago Bludvist, will ultimately rake in more than $600 million globally, dwarfing the overall take of the first film—no matter if it’s in more Chinese renminbis, Russian rubles, and British pounds than American dollars. So which is Dragon 2, an unqualified success or a curious underachiever? And what to make of the drastically different receptions from American and foreign audiences?

Coming into the summer, the stars seemed to be aligned for Dragon 2 to be this year’s Despicable Me 2. Both franchises got their start in 2010, with Dragon opening in March and going on to gross $218 million, and Despicable following in July with $252 million. Then, last year, Despicable Me 2 surpassed expectations and made $368 million at the box office, muscling Pixar’s Monsters University out of the way to win the summer family-movie title. Dragon 2‘s path to domination seemed even more clear when Pixar delayed The Good Dinosaur from June 2014 to November 2015; leaving Disney’s B-level sequel, Planes: Fire & Rescue as the only real animated competition. Fueled by the success of the first film and two seasons of a popular Dragon TV show, Fox planted the Dragon 2 flag on June 13, a prime summer-movie weekend that had once launched Finding Nemo, Cars, and more recently, DreamWorks’ own Madagascar 3: Europe’s Most Wanted. Its major opening-weekend competition was 22 Jump Street, an R-rated comedy presumably with very little audience overlap. Box-office analysts predicted a healthy $60 million dollar opening weekend and a long run in theaters that would soak up major dollars from repeat audiences.

Opening weekend audiences went home happy, reflected by an A CinemaScore grade, and critics were generous, with a 92 percent “fresh” rating on RottenTomatoes.com and a 76 score on Metacritic.com. “The movie’s visual scope is magnificent,” wrote EW‘s Joe McGovern, who graded the film a modest B. “This is still a franchise that knows how to fly.”

But when the weekend numbers were totaled, Dragons 2 failed to hit expectations, taking home $49.5 million. It was a surprising blow, especially since the original 2010 film had opened to nearly the same amount ($43.7 million) despite its chilly March release date and without a built-in brand. What’s more, that film dropped just 33 percent in its second weekend and stayed in the weekend’s top 10 for 10 weeks. Dragon 2 dropped off a rocky 50 percent in its second weekend, and hung around the top 10 for only six weeks. A month after its release, no family film had emerged as the Despicable Me 2-style runaway box-office leviathan, and Dragon 2 was just another summer movie competing with other giant tentpoles.

But internationally, it was a different story. In China, where it debuted Aug. 17, Dragon 2 opened to $25.9 million, eight times the opening weekend of the original film. In Italy, its opening weekend grosses doubled the original’s, and Anglo-speaking territories like Australia and Britain saw huge percentage jumps in box-office grosses compared to the first film.

Plenty of people are looking for answers—including, no doubt, the bean-counters at Fox and DreamWorks. (Fox and DreamWorks both declined to be quoted for this story.) But the initial panicked question of, “What went wrong?” is now part of a larger question about animation and the different cinematic expectations of various global audiences, in particular U.S. audiences. It’s possible that what separated the Dragon franchise from its more cartoonish peers might have ultimately limited its potential here as well. In the first Dragon movie, Hiccup and his jet-black dragon Toothless fight a Queen beastie while simultaneously avoiding not-so-friendly fire from the dragon-hating Viking tribe led by his father. In the end, Hiccup is injured and loses his leg, making the film the rare American animated blockbuster that demonstrates painful and lasting consequences for heroism.

Dragon 2 goes much further down that road. Spoiler alert: In the sequel, Toothless is brainwashed by Drago to attack Hiccup, and the boy is saved from a blast of dragon fire only when his father, Stoick, pushes him out of the way at the last instant. Hiccup survives, but Stoick is hit and dies on the battlefield. Certainly, killing off a parent hasn’t hurt the the bottom line of animated blockbusters like The Lion King or Finding Nemo, but perhaps the shock, the slightly darker context of the circumstances that led to the death, and the fact that Hiccup and Stoick are human (and not adorable cartoon animals) led to parental word-of-mouth that, as good as the film was, maybe this wasn’t the animated adventure to bring the really young kiddies to. “American family audiences may very well be conditioned to like their animated films to be light-hearted and easily accessible and cute (Minions, anyone?) and epic stories may play better in the international marketplace,” says Paul Dergarabedian, a senior media analyst for Rentrak. “Needless to say it’s still a very impressive performance, at close to $600 million globally.”

Might that be why Dragon 2, a movie with all the thrill and danger of one of the later Harry Potter adventures, got the relatively cold shoulder? Too heavy for the tots, not cool enough for the teens? Do Americans have an extremely narrow and limited view of what animation must be: Minions, joshing donkeys, and magic snowmen? But didn’t Pixar blow that formula to smithereens time and time again, in movies like Toy Story (1-3), Up, and The Incredibles. Even The LEGO Movie stretched the canvas of animation and complex storytelling, and audiences didn’t seem to flinch at that.

From a business perspective, this entire debate might be moot: Nearly 70 percent of the entire industry’s box-office revenue now comes from foreign markets, and Dragon 2‘s financials—29 percent domestic, 71 percent foreign—fit right into that trend. At the end of the day, Dragon 2 will be one of the year’s top 10 most successful movies and one of DreamWorks’ biggest grossers ever. A third Dragon film is already scheduled for June 2016. If American audiences are behind the curve when it comes to appreciating animation, will they have caught up by then?


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Sunday, May 22, 2011

Aircastle's Flying High With Solid Numbers (The Motley Fool)

Aircastle Limited (NYSE: AYR - News), a global company that leases and sells commercial jet aircrafts, declared its quarterly results a few weeks ago. The company's strong financial health is well reflected in its quarterly numbers. Let's analyze the numbers from Capital IQ, a division of Standard & Poor's, to see if Aircastle is truly prepared to take flight.

Numbers give us a direction
Total revenue for the company increased to $157.9 million from $130.5 million in the first quarter of 2010, a gain of approximately 21%. This was mainly because of an increase in revenues from lease and rental services. Accordingly, net income ballooned 125% to $42.7 million from $18.1 million in the year-ago quarter. Although that's a substantial leap, it only tells half the story, and we need to discover more.

Digging deeper
It's always important to check how much profit Aircastle generates from shareholders' money -- that is to say, how efficiently it operates. Return on equity gives a clear idea on precisely this.

Aircastle's ROE increased from 5.8% in first quarter of 2010 to 12.5% this quarter. That's a big leap. Its ROE is much better than its peer Atlas Air Worldwide (Nasdaq: AAWW - News), whose ROE stands at a mere 4% for the same period. That's pretty good number to hold shareholders' attention. Indeed, Aircastle makes good use of its investors' money.

The latest quarter's net income margin for Aircastle almost doubled to 26.5% from 13.9% in the corresponding quarter last year. Also, this is better than Atlas Air Worldwide and Aercap's (NYSE: AER - News) net income margin of 3.5% and 19.9%, respectively. It shows how efficiently Aircastle is able to convert its incremental revenues into income as compared with its rivals. It'd be best to hold on to this stock until rivals plan anything better.

Foolish bottom line
Air traffic volume is set to increase globally as economies recover from the economic meltdown. According to the International Air Transport Association, the demand for passenger traffic and cargo traffic increased by 5.9% and 4.6%, respectively, in the first quarter this year, compared with the same period last year.

Aircastle has a fleet base of 134 aircrafts, and of those, 92% are latest-generation aircrafts. This cuts down the possibility of greater wear and tear and high maintenance costs. It has a "weighted average" fleet utilization rate of almost 99% in the first quarter of 2011. This efficiency will give it a good advantage to service the growing demand in both passenger and cargo traffic in the future.

Bibhudutta Subhasish does not own shares of any of the companies mentioned in this article. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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