DreamWorks CEO deflects questions about its uncertain future
In public comments accompanying DreamWorks Animation SKG Inc.’s second-quarter financial results, Chief Executive Jeffrey Katzenberg punted questions about the company’s uncertain future with distributor Paramount Pictures and a pending deal with Netflix Inc., focusing instead on the soft domestic performance of “Kung Fu Panda 2” and the future of 3-D.
His statements came as the Glendale studio reported sales of $218.3 million, well above most analysts’ estimates, and net income of $34 million in the three months ended June 30. The earnings report sent the studio’s stock up 6% in after-hours trading Tuesday.
This month, Viacom’s Paramount Pictures announced it would produce its own animated movies beginning in 2014 and confirmed it would continue to release DreamWorks Animation pictures at that point only if it got a higher cut of revenue.
On a conference call with analysts, Katzenberg declined to comment on what Paramount’s move would mean for his studio.
“What we are not going to do is move prematurely to try and answer a question that does not need to be answered yet,” he said.
He also declined to address reports that DreamWorks would in 2013 end its pay television deal with HBO and sign an exclusive contract with Netflix.
Katzenberg was loquacious on the disappointing $160-million domestic box-office take for May’s “Kung Fu Panda 2.” He blamed it on the stronger-than-expected opening on the same weekend of “The Hangover Part II,” which played to a broader audience than most R-rated comedies. Internationally, “Kung Fu Panda 2” has grossed a much stronger $440 million.
He also expounded on the state of the 3-D market. Katzenberg, an outspoken proponent of the technology the last few years, admitted that America’s interest has slipped.
“There has been too much extreme on the optimistic side of it, and I’m probably somewhat to blame for that,” he said. However, he noted that 3-D continues to be very popular overseas.
Before rising in after-hours trading, DreamWorks Animation stock closed down 2% at $21.57 on Tuesday. Its shares are down 29% from a year-to-date high of $30.52 in February.
