The Hobbit: One Film To Rule Them All (At The Box Office This Weekend), Says MKM

The much-anticipated film The Hobbit is the only major release this weekend, but MKM Partners analyst Eric Handler thinks that the movie alone should still be able to propel the box office to double-digit growth.

In a note out today, Handler estimates that the box office could increase by 17% year-over-year on the strength of the Warner Bros. film, with the top ten films grossing $124 million total, versus $106 million a year ago. He estimates that The Hobbit will make $86 million; this will top I Am Legend�s 2007 record for December opening-weekend box office receipts. �Second place should be a battle between Rise of the Guardians and Lincoln, for which we have $6.5mn estimates. Rounding out the top five are Skyfall and Life of Pi, with estimated grosses of $5.5mn and $5mn, respectively.�

Nonetheless, Handler writes that The Hobbit�s legs could be short: Although it took in $12.4 million in midnight showing receipts, reviews have been tepid (in contrast to the Lord of the Rings trilogy), raising concerns about its long-term performance.

However, that may be offset by the fact that The Hobbit will enjoy ticket premiums for 3D and IMAX (IMAX) showings that were largely lacking for the previous trilogy, as it is launching in more than 3,100 3D screens across North America. �We project a $20mn global box office opening-weekend haul for IMAX from The Hobbit,� he writes. �Our projection is based on a $40k per-screen average (PSA) for North America ($13mn total) and a $56k PSA internationally ($7mn total). International totals could prove a bit below average, as The Hobbit is not yet open in IMAX�s top two markets, Russia and China.�

Overall, Handler notes that the box office is still beating expectations in the fourth-quarter, up 22.9% based on Regal Entertainment�s (RGC) fiscal �calendar and 22% on Cinemark�s (CNK). �Flat box office results for the remainder of the quarter would equate to roughly 17% overall growth, up from our recently raised forecast of 14% (we believe consensus now suggests 10%+ box office growth),� Handler writes. �At our projected growth rate, the yearly box office would grow about 6%, to $10.70bn, and would surpass the annual box office record of $10.59bn set in 2009.�