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DreamWorks Animation reports 103% earnings increase

The success of 'Shrek Forever After' helps DreamWorks shatter analysts' estimates with a $39.8-million profit in the quarter ended Sept. 30.

October 27, 2010|By Richard Verrier, Los Angeles Times

DreamWorks Animation Studios, riding a wave of revenue generated by its summer movie "Shrek Forever After," reported a 103% increase in profit for the quarter ended Sept. 30.

The Glendale-based studio earned $39.8 million, or 47 cents a share, on revenue of $188.9 million, compared with net income of $19.6 million, or 23 cents, on revenue of $135.4 million for the same period in 2009.

The results blew past Wall Street estimates. Analysts surveyed by Thomson Reuters had forecast a profit of 35 cents per share on revenue of $163 million.

"Our strong third quarter was driven primarily by the box-office success of 'Shrek Forever After,' which has become DreamWorks Animation's highest-grossing international release of all time," said DreamWorks Chief Executive Jeffrey Katzenberg.

Although the fourth "Shrek" film did not perform as well as most investors had hoped in the domestic market, the sequel made up for it overseas, so far generating $497 million in international ticket sales for a worldwide box-office total of $735 million. The film contributed $120.4 million in revenue in the quarter.

"Shrek Forever After" is the second film DreamWorks released this year, following "How to Train Your Dragon," which opened in theaters in March and subsequently became a top-selling DVD since its release in home video this month.

DreamWorks' next film, "Megamind," comes out in the U.S. on Nov. 5, marking the first time the studio has released three movies in a single year. The studio last year said it would increase the frequency with which it released films in a move to boost revenue and provide more stable results. DreamWorks' quarterly results can vary widely depending on whether it has a film or DVD on the market at the time.

In a conference call with analysts, Katzenberg also touted the studio's growing TV business, noting that the studio will have four TV series on the air by 2012, including a Cartoon Network show based on "How to Train Your Dragon."

Results were released after the market closed, but investors responded favorably in after-hours trading. The company's shares rose 80 cents to $35.16

"The company continues to impress me with their ability to convert the good performance of their films into bottom-line success," said Doug Creutz, an analyst with Cowen U.S. Equity Research.

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