DreamWorks profit jumps 95% despite some disappointments
DreamWorks Animation had good news and a bigger dose of bad news in its fourth quarter, as strong DVD sales for “How to Train Your Dragon” were reported alongside a disappointing DVD release for “Shrek Forever After” and a weak box-office run for “Megamind.”
The Glendale animation studio also took write-downs on its unsuccessful “Kung Fu Panda” virtual world and the national tour of its live stage show “Shrek the Musical.”
DreamWorks released three movies in 2010, the most it has put out in a single year. March’s “How to Train Your Dragon” took in $495 million worldwide, a solid number for a new property. The sequel “Shrek Forever After” underperformed in the U.S. and Canada, grossing only $239 million — the lowest for the franchise — but a healthy $511 million overseas. November’s release, “Megamind,” was a disappointment, selling just $319 million worth of tickets worldwide.
“Dragon” and “Shrek” both came out on DVD in the fall and sold 7.5 million and 7.2 million copies worldwide, respectively.
On a conference call with analysts, Chief Executive Jeffrey Katzenberg said DVD sales for “Dragon” were strong relative to its box-office performance, perhaps reflecting strong word of mouth for the film, which got good reviews. However, Katzenberg said the company was not satisfied with DVD sales for its fourth “Shrek” picture, noting that it was lower than previous movies in the series.
Despite the soft box-office performance of “Megamind,” Katzenberg said he expects that the superhero comedy will be profitable. It comes out on DVD on Friday.
DreamWorks’ results were dragged down by the Kung Fu Panda virtual world, which launched in April. Its operating loss for the quarter was $15 million, including a write-down of $12 million. Similarly, the national tour of the Broadway show “Shrek the Musical” recorded an operating loss of $10 million, including a write-down of $8 million.
Reflecting the increase in film releases to three in 2010 from one in 2009, DreamWorks’ revenue for the fourth quarter jumped 42% from a year earlier to $275.7 million, and net income was up 95% to $85.2 million.
DreamWorks Animation stock rose 7 cents, or less than 1%, to $28.10 on Thursday before financial results were released.
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