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DreamWorks rides 'Madagascar 3' success; profit jumps 24%

DreamWorks Animation posts earnings of $24.4 million on revenue of $186.3 million in the quarter that ended Sept. 30. The results easily exceeded Wall Street estimates.

November 02, 2012|By Richard Verrier, Los Angeles Times

DreamWorks Animation reported a 24% jump in profit in the third quarter, largely due to the box-office success of its animated film "Madagascar 3: Europe's Most Wanted."

The Glendale-based studio posted net income of $24.4 million, or 29 cents a share, on revenue of $186.3 million in the quarter that ended Sept. 30. That compared with a profit of $19.7 million, or 23 cents per share, on revenue of $160.8 million during the same period in 2011.

The results easily exceeded Wall Street estimates. Analysts had expected earnings of 11 cents per share on revenue of $139.4 million, according to Thomson Reuters.

DreamWorks Animation Chief Executive Jeffrey Katzenberg said the results reflected the "blockbuster international box-office success" of "Madagascar 3," which he said was the fifth-highest-grossing film of the year on a global basis.

Since its June 8 release, the movie has grossed more than $216 million at the domestic box office and approximately $503 million internationally.

In a conference call with analysts, Katzenberg also touted the studio's expansion into China and its efforts to build its television business.

Oriental DreamWorks — the newly formed joint venture with China's largest media companies — recently purchased a studio in Shanghai that will work on "Kung Fu Panda 3" and other projects, Katzenberg said.

He said DreamWorks was having "active discussions" about launching its own television network. The studio unveiled a new TV series, "DreamWorks Dragons: Riders of Berk," on the Cartoon Network on Sept. 4. Two other animated series inspired by the studio's films also air on Nickelodeon: "Kung Fu Panda: Legends of Awesomeness" and "Penguins of Madagascar." DreamWorks last month announced plans for a new television series based on the 2013 feature film "Turbo."

Katzenberg also hailed the company's new distribution agreement with Twentieth Century Fox, which takes effect next year. "Fox is an ideal partner for us," he said.

"Puss in Boots" contributed $44.8 million of revenue to the quarter, driven mainly by domestic and international pay television. The studio also got a $50.6-million revenue boost, mostly from a new television deal with the BBC.

The acquisition of Classic Media, which closed Aug. 29, produced approximately $4 million of revenue, largely from home entertainment. DreamWorks in August paid $155 million to buy Classic Media, which owns the rights to "Casper the Friendly Ghost," "Lassie," "The Lone Ranger" and other iconic entertainment characters.

Fourth-quarter results are expected to be driven by the continued performance of "Madagascar 3" and of the upcoming "Rise of the Guardians," which will be released Nov. 21.

DreamWorks Animation shares rose 20 cents, or 1%, to $20.61 on Thursday and are up 24% this year.

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