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Analyst predicts $96-million write-down on 'Rise of the Guardians'

January 02, 2013|By Richard Verrier
  • DreamWorks Animation's "Rise of the Guardians," which features a squadron of folk heroes, has been a dud at the box office.
DreamWorks Animation's "Rise of the Guardians," which… (DreamWorks Animation )

DreamWorks Animation may end up losing nearly $100 million on its recent holiday release "Rise of the Guardians."

That's the sobering prediction of Lazard Capital Markets analyst Barton Crockett.  In a research note on Wednesday, Crockett said he expects the Glendale-based studio will take a $96 million write-down on "Rise of the Guardians," which has been a rare box office flop for DreamWorks.

'Rise of the Guardians,' which cost about $145 million to make, has generated $261 million in global box office ticket sales since its debut in late November, well below that of a typical DreamWorks Animation movie.  The movie -- about a group of folk heroes, including the Tooth Fairy and Santa Claus, who join forces to protect children from an evil nemesis -- has yet to open in New Zealand, Poland, Turkey and Japan.

"While bulls want to look past this write-off, the risk is that a second flop like 'Guardians' could dramatically change sentiment," wrote Crockett, who had previously estimated that studio would take a $45-million write-down.

He anticipates the company will post a 44-cents-per-share loss in the fourth quarter, compared to his earlier prediction of a 6-cent loss.

Crockett's write-down estimate is on the high end of what other analysts have projected. Last year, Doug Creutz of Cowen Group estimated the studio would lose $70 million on the film.

DreamWorks Animation's biggest money-loser was 2006's "Flushed Away," co-produced with British-based Aardman Animations, for which it took a $109 million write-down.

"Rise of the Guardians" faced stiff competition during a record Thanksgiving weekend at the holiday box office, going up against "Lincoln," "Life of Pi," "Twilight: Breaking Dawn Part 2," "Skyfall" and Disney's holdover animated hit "Wreck-It Ralph."

DreamWorks shares closed at $16.28, down 29 cents. Shares have dropped 15% over the last three months.

A spokeswoman for the studio declined to comment on Crockett's report.

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