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DreamWorks Animation results beat estimates

Revenue rose 26% in the first quarter, thanks to home video and international ticket sales from the 'Shrek' spinoff, 'Puss in Boots.'

May 03, 2012|By Richard Verrier, Los Angeles Times

DreamWorks Animation, the Glendale studio behind the "Shrek" and"Kung Fu Panda" movies, saw its revenue jump 26% to $136.1 million in the first quarter.

The company said it earned a profit of $9.1 million, or 11 cents a share, in the three months ended March 31, a 3% increase over the year-earlier period. The growth reflected home video and international ticket sales from the "Shrek" spinoff,"Puss in Boots,"which grossed $554 million worldwide since its release in October.

Analysts polled by Thomson Reuters had estimated earnings of 9 cents a share and revenue of $134 million in the quarter.

Investors will closely watch the performance of DreamWorks' next release,"Madagascar 3: Europe's Most Wanted,"which opens June 8. The film will compete with Disney's animated feature "Brave," which will also hit theaters next month.

Another question for investors is whether DreamWorks will seek to release its own movies once its current distribution deal with Paramount Pictures expires this year. Last Fall, DreamWorks tapped respected distribution veteran Chuck Viane to advise the company on its options, including the prospect of distributing its own movies.

"It would be premature to presume that self-distribution is not a serious and viable option for us," DreamWorks Animation Chief Executive Jeffrey Katzenberg told analysts, adding that he expected to reach a decision by Labor Day.

Katzenberg said he was "very excited" about opportunities to expand business in China, where the company recently announced plans to build a studio in Shanghai with two state-owned Chinese media companies. He declined to comment on letters that DreamWorks and several other studios received from federal regulators investigating allegations of inappropriate dealings with Chinese officials.

DreamWorks shares closed Wednesday at $18.46, down 2%. The company's stock has fallen by nearly a third in the last year amid concerns of slowing DVD sales.

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