Research Guru / Moderator
Posted:
Apr 29, 2008, 7:13 PM
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DreamWorks Animation first-quarter profit up 69%
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Dreamworks Animation SKG Inc. on Tuesday credited world box-office sales of "Bee Movie" and DVD sales of Shrek The Third for helping its first-quarter net profit jump 69% from the same period a year ago.
The Glendale, California-based company posted net earnings of $26.1 million (28 cents per share), up from $15.4 million (15 cents a share) a year ago. Revenue reached $156.6 million, up 67% from the $93.7 million posted a year earlier.
Tuesday's results exceeded the predictions of Wall Street analysts. They had expected net profit of 22 cents per share on revenue of $127 million, according to Thomson Financial.
In the first quarter, Bee Movie provided $48.9 million in revenue, raising the film's worldwide theatrical takings to $287 million. Some 4.8 million DVD units of the film have been sold in the United States.
However, Dreamworks Animation CEO Jeffrey Katzenberg warned that because of its high expense, Bee Movie will barely turn a profit, with no little impact on earnings going forward.
Meanwhile, the release of Shrek the Third into foreign DVD markets helped add $48.3 million in revenue during the quarter. About 19.8 million units have been shipped to date.
Older titles contributed $18.7 million. Of this figure, $15.9 million came from 2005's Madagascar, mostly from DVD sales, the company said.
Kung Fu Panda, scheduled for release June 6, is expected by the company to be its main source of earnings for the year.
The sequel Madagascar: Escape 2 Africa opens November 7 in theaters. However, it won't contribute to earnings until 2009, after the company's distributor, Paramount Pictures, is reimbursed for expenses, DreamWorks Animation said.
And in December, DreamWorks will open a Shrek musical on Broadway.
In a separate development, Katzenberg warned that the earning potential of Monsters vs. Aliens -- the company's first 3-D movie, set for release next March -- could be hurt by the lack of digital projectors with 3-D capabilities. During a conference call with analysts, he blamed studios and theater chains for the shortage.
Just over 1,000 screens in the United States are currently set up to show 3-D films.
"When you hear me talk about my disappointment, it is in the context of really trying to achieve the 5,000-plus screens installed by the time of our release," Katzenberg. "If these guys don't get their act together very quickly in the next 30 days, they are not going to be able to achieve that goal."
DreamWorks hasn't decided whether to release Bee Movie or Kung Fu Panda in Sony Corp.'s high-definition Blu-Ray DVD format, Katzenberg added.
Shares of DreamWorks Animation rose 5% ($1.26) to $27.00 in extended trading on the New York Stock Exchange after the results were announced. DreamWorks had fallen to $25.74 at 4 p.m. in composite trading. Shares have risen less than 1% this year.
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"Oh boy." -- Allan Sherman
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