DreamWorks Animation shares fall after ‘Rise of the Guardians’ poor debut
Shares of DreamWorks Animation took a hit in the wake of a poor box office debut for “Rise of the Guardians.”
DreamWorks’ stock fell as much as 5.8% on Monday after some analysts warned that the Glendale-based studio could be forced to take a significant write-down on its latest computer animated movie.
The 3-D movie pulled in $32.6 million over the five-day Thanksgiving holiday period, marking a rare misfire for a studio that has reaped big rewards from its “Madagascar,” “Shrek” and “Kung Fu Panda” films.
That’s the worst debut for a DreamWorks animated movie since 2005’s “Wallace and Gromit: The Curse of the Were-Rabbit” and 2006’s “Flushed Away,” which were both co-produced with British-based Aardman Animations.
“Rise of the Guardians” faced stiff competition during a record weekend at the holiday box office with “Lincoln,” “Life of Pi,” “Twilight: Breaking Dawn Part 2,” “Skyfall”, as well as Disney’s holdover animated hit “Wreck-It-Ralph,” which generated $23 million over the five days.
The tepid box office results for “Rise of the Guardians” caught Wall Street off guard. Shares in DreamWorks Animation fell 97 cents to $17.08 in midday trading Monday.
“This is the worst-ever opening weekend performance for a DWA-produced CG film,” analyst Doug Creutz of Cowen Group wrote in a report. Creutz, who originally estimated the movie would at least break even, predicted the studio would lose $70 million on the film, which he said cost about $145 million to produce.
“We think the psychological impact of DWA producing a significantly money-losing film is more serious relative to share performance than any loss directly attributable to the ‘Guardians,’ ” Creutz added.
Caris & Co. analyst David Miller called the results from “Rise of the Guardians” “shockingly low” and also said in an investor note that the company could be forced to take a write-down on the film.
He downgraded the stock to a below-average rating, the equivalent of sell, from a neutral rating, and reduced his 2013 earnings estimate for DreamWorks to 90 cents from $1.15 a share.
A spokeswoman for DreamWorks Animation declined to comment on the market’s reaction to the underperformance of “Rise of the Guardians,” about a group of folk heroes, including the Tooth Fairy and Santa Claus, who join forces to protect children from an evil nemesis.
Anne Globe, head of worldwide marketing for the studio, told The Times on Sunday that she was optimistic about the movie and that its “terrific theme of belief and great holiday message for families are ideas that will build as the holidays play out.”
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