DreamWorks Animation’s profit falls 21% despite ‘Kung Fu Panda’
A slovenly panda gave DreamWorks Animation SKG better-than-expected third-quarter results Tuesday, but couldn’t overcome the monstrous revenue delivered a year earlier by a green ogre.
Driven by the worldwide box office of “Kung Fu Panda,” DreamWorks Animation reported net income of $37.4 million, or 41 cents a share, down 21% from the same quarter a year earlier, when it released “Shrek the Third.” Revenue fell 6% to $151.5 million.
“Kung Fu Panda,” released in June, generated more than $630 million in worldwide ticket sales. Although a blockbuster, it wasn’t able to top “Shrek the Third,” which has sold $799 million in worldwide tickets.
Still, the Glendale-based studio’s earnings beat Wall Street’s expectations. Analysts polled by Thomson Reuters had predicted net income of 31 cents a share and revenue of about $130 million.
The results were in line for a small studio that releases a limited number of movies and whose performance therefore can swing widely depending on a single picture.
“This is a company that trades much more off the box office,” said Doug Creutz, a media analyst with Cowen & Co.
In a call with analysts, DreamWorks Animation executives touted the Nov. 7 release of the sequel “Madagascar: Escape 2 Africa” as well as a “Shrek” musical debuting on Broadway in December.
Company executives said fourth-quarter results would be driven mainly by home-video sales from “Kung Fu Panda,” which will be released Nov. 9.
Chief Executive Jeffrey Katzenberg told analysts that the DVD market had remained robust despite the decline in consumer spending.
Katzenberg also announced Tuesday that David Geffen would leave the company’s board, where he has been a director since October 2004. That’s when DreamWorks Animation split from the original DreamWorks founded 14 years ago by Geffen, Katzenberg and director Steven Spielberg.
Geffen owns 5.76% of DreamWorks Animation’s shares and retains a 22% voting control of the stock.
“Without him there would be no DreamWorks Animation,” Katzenberg said.
The company’s shares rose $1.88, or 7.3%, to $27.49.