UPDATE, 2:25 PM: DreamWorks Animation CEO Jeffrey Katzenberg has put away his pom-poms for 3D — and the higher ticket prices he has urged exhibitors to charge for it. He says that DreamWorks Animation will offer 2D versions of its films in addition to 3D because “we remain sensitive to the fact that we’re in a stressed economy bordering on a recession.” He admits that he’s “probably somewhat to blame” for the market’s overly optimistic expectations for 3D. Prospects for the technology are “in flux,” he says. But investors have become too pessimistic. His company’s commitment to 3D represents ”one of the best returns on investment of anything that DreamWorks Animation has done.”

Katzenberg won’t discuss his plan to offer online streaming rights to his films exclusively to Netflix: “We’re going to take a pass and punt on this one today. Lots of gossip and rumors and things going on. I’d prefer to take a no comment on this.” As for Kung Fu Panda 2, the CEO says it was “a terrible, terrible calamity” that the film came out in the U.S. the same week as The Hangover Part II. ”This is the first time we met a buzzsaw,” he said. The competition sliced about $20M from the expected box office sales for the animated film, he says. “It’s heartbreaking because there’s no recovering from it.” But he adds that “nowhere else in the world did this happen to us.” Indeed, while KFP2 “didn’t meet our expectations” domestically, it remains “a solid, profitable film” and “a valuable franchise.”

Nothing to report on DreamWorks’ talks to renew the distribution agreement with Paramount that expires at the end of 2012. Katzenberg says he won’t “answer a question that doesn’t have to be answered yet.” He adds that he’s unfazed by Paramount’s decision to ramp up its animation following its recent release of Rango. That film “had zero impact on us and our relationship with them.” Paramount’s plan “reaffirms the value and appeal of animation.”

DreamWorks shares initially soared more than 7% in after-hours trading. By the end of the analyst call they were up 4.3% over Tuesday’s $21.57 closing price.

PREVIOUS, 1:17 PM: DreamWorks Animation reported 2Q net income of $34.1M, up 42.1% vs the same period last year, on revenues of $218.3M, up 38%. Profits at 40 cents a share matched analysts’ consensus forecast. But the revenue number was higher; the Street expected $197.1M. Kung Fu Panda 2, released May 26, contributed $55.8M in revenue for the quarter. CEO Jeffrey Katzenberg notes that the film “is currently the fifth-highest-grossing film of 2011 on a global basis and has grossed over $600 million at the worldwide box office to date.” Still, many investors expected the film to do even better.

We’ll return with info from the company’s call with analysts where there are sure to be questions about prospects for 3D — and DWA’s deal plans with Netflix.