DreamWorks Adds to Chairman’s Duties

DreamWorks Animation SKG Inc. gave Chairman Roger Enrico more authority Monday, two weeks after the company said lower-than-expected home video sales would cut profit this year.

Chief Financial Officer Kristina Leslie and General Counsel Katherine Kendrick will report to Enrico and Chief Executive Jeffrey Katzenberg, Glendale-based DreamWorks said in a regulatory filing. They previously reported to Katzenberg and Chief Operating Officer Ann Daly.

The new arrangement gives Enrico, former chief executive of Pepsico Inc., more control over finances and legal matters as the Securities and Exchange Commission conducts an informal probe into financial disclosures and trading of DreamWorks shares. The reduction of Daly’s duties will put her focus on film production and home video sales, the company said.

“The people running DreamWorks come from a creative background, not the corporate financial sector,” said David Baker, a principal at Boston-based investment management firm North American Management Corp. Enrico will “direct changes at the management level and bring in people with sharp pencils.”

Shares of DreamWorks fell 40 cents to $22.58. They have declined 16% since the company reduced its forecast July 11.

Daly will “devote 100% of her time to oversee the production of our movies, run the studio and, in particular, oversee the most important revenue source of our business, home video,” Katzenberg said in a statement.

Enrico, who was named chairman at DreamWorks in October, is taking on more responsibility as the company adjusts its formula for predicting sales of digital videodiscs.

Lower-than-expected sales of “Shrek 2” DVDs led the company this month to cut its profit forecast for the year. It was the second reduction in two months, underscoring the company’s difficulty gauging DVD sales.

Pixar Animation Studios, maker of “The Incredibles,” also said this month that it miscalculated DVD sales, prompting concern that growth of home video sales might be sputtering after boosting earnings over the last year.

Katzenberg said in a July 11 conference call with analysts that DreamWorks did not know whether the lower-than-expected sales of DVDs including “Shrek 2” were a short-term retail problem or a shift in consumer spending.