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DreamWorks Animation Shares Fall After Film Releases Shuffled

Investors are casting a jaundiced eye on last night’s news about DreamWorks Animation’s delayed release of Mr. Peabody and Sherman (to Spring 2014 from 2013), and the removal of Me & My Shadow from the 2014 list. The stock is down 3.8% in mid-afternoon trading to $16.76, and has sold today for as little $16.26. Piper Jaffray’s James Marsh downgraded the company to “Neutral,” and reduced his price target to $18 from $25. He’s concerned because “this is the second time the company has backed away from a more ambitious three film per year slate and all of its economic benefits.” What’s more, it means that there’s additional pressure for DreamWorks Animation to succeed this year with The Croods and Turbo. Following the lower-than-expected box office for Rise Of The Guardians, “a disappointment by Croods sets in place a trend.” He notes that Croods is “tracking light” while “Turbo faces a tough competitive environment this summer.”  Read More »

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Wall Street Grows Nervous About DreamWorks Animation’s Bet On ‘Guardians’

The independent studio’s shares are down 4.6% in mid-day trading, and more than 9% since November 2 — their peak over the last 52 weeks — as investors fear that Rise Of The Guardians could fall far short of their expectations. The consensus view among analysts is that the film will generate $58M at domestic box offices over the five-day Thanksgiving holiday, propelling the film to an eventual $170M — with more to come from overseas. Forecasts are all over the lot, though. This morning Susquehanna Financial Group’s Vasily Karasyov projected a $68M five-day domestic box office, headed to $200M. Cowen and Company’s Doug Creutz expects $57M and $160M. And Lazard Capital Markets’ Barton Crockett anticipates $48.4M and $176M. He says the next few days will be a “nail-biter” time for DreamWorks: If Guardians falls short of forecasts then “the movie could be a rare and meaningful money-loser for the studio.” That’s a serious risk. Variety says that tracking reports indicate the film “will hit the $40 million domestic mark over the five-day frame.” Over at the Hollywood Stock Exchange, the value of its virtual shares in Guardians have plummeted more than 25% since mid-October. Just two months ago Janney Capital Markets’ Tony Wible upgraded his DreamWorks recommendation to “neutral” — and less than two weeks later upgraded again to “buy” — in part because of his belief that “the Guardians is setting up to be a major film.” He projected at the … Read More »

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DreamWorks Animation Q2 Earnings Fall Short Of Forecasts

If there’s good news in the report, it isn’t apparent from the basic numbers. DreamWorks Animation reported net income in Q2 of $12.8M, -62.5% vs the period last year, on revenues of $162.8M, -25.4%. Analysts expected revenues closer to $186.2M. And earnings of 15 cents a share were way below forecasts for 25 cents. Madagascar 2: Europe’s Most Wanted, which was released on June 8, accounted for $54.8M of the revenue. Another $22.8M came from Puss In Boots, primarily home videos. Domestic pay TV sales drove the $46.4M contribution from Kung Fu Panda 2. The biggest contributor to revenues outside of feature films was the London run of Shrek The Musical, which was part of the $10M coming from other items. CEO Jeffrey Katzenberg offered little by way of explanation in the company’s earnings release but says that the latest Madagascar “has surpassed $500M at the worldwide box office to date, with a large number of key international territories yet to come.”

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Analysts Raise DreamWorks Animation Forecasts On ‘Madagascar 3′s’ Strong Open

That could result in a nice pop for DreamWorks Animation shares — which closed at $18.01 on Friday — all things being equal. The nearly $60M domestic box office sales for Madagascar 3: Europe’s Most Wanted were well ahead of the $45M predicted by Barclays Equity Research analyst Anthony DiClemente. This morning he raised his 2012 earnings per share estimate for DreamWorks to 95 cents a share from 93 cents — but left his “underweight” recommendation and $15 target price unchanged. “While the weekend take fell just short of Madagascar 2’s $63M haul in 2008, it was still a very impressive result,” he says. He now forecasts that Mad 3 will generate $175M at domestic box offices, up from his previous $165M, with international box office of $420M, up from $413M. Janney Capital Markets’ Tony Wible also is impressed by DreamWorks “first film in years to beat (U.S. box office) opening expectations” — which he says distributor Paramount “had been talking down” to $45M. He, too, raised his EPS estimates a penny to 77 cents for the current quarter and $1.17 for the year.  Wible’s concerned that Mad 3‘s “run may be short-lived.” Read More »

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UPDATE: DreamWorks Animation Will Have Distribution Plan By Labor Day

DreamWorks Animation 2012 EarningsUPDATE, 2:15 PM: No update on the big question DreamWorks Animation faces: Who will distribute its films beginning next year, when its current deal with Paramount expires? The process to decide that “will begin in June” after Madagascar 3 is out, CEO Jeffrey Katzenberg says. “We anticipate it being concluded no later than Labor Day.” He added that “all options are on the table” including self-distribution — something that Katzenberg says the company is “fully exploring.” The value of any deal DreamWorks makes shouldn’t be judged just by the distribution fee, he says; there could be synergies like the ones DreamWorks has with Nickelodeon. Read More »

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DreamWorks Animation Shares Fall On Disappointing ‘Puss In Boots’ Open

Wall Street clawed 7.8% from the company’s stock price, which ended the day at $18.55, following Puss In Boots’ lower-than-expected $34M opening weekend. Analysts acknowledged that the film suffered from the blizzard that hit the Northeast as well as an exciting World Series that included a seventh game on Friday. Still, several say they’re frustrated with DreamWorks Animation, which has lost 47.5% of its value over the last 12 months. The weekend performance is “yet another argument supporting our thesis that it is time for the company to revise its film costs structure,” says Susquehanna Financial Group’s Vasily Karasyov — who now believes Puss will gross a maximum of $136M domestically, down from his pre-opening forecast of $201M. “Average attendance per original film has declined by around 20% since 2008,” he adds, even though ”the studio still spends $135M to make a film and $170M to release it.”  Janney Capital Markets Tony Wible dropped his domestic box office estimate to $153M from $195M, saying that the weekend shows “the (Shrek) franchise is completely out of momentum.” Barclays Capital’s Anthony DiClemente says he now believes Puss will gross $145M domestically, down from $165M, although ”the film could exceed our moderated estimates” if there’s positive word of mouth. But Lazard Capital Markets’ Barton Crockett says that the anemic tracking results for the film before it opened shows ”either that the marketing did not click, that the decision to open Halloween weekend … Read More »

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UPDATE: ‘Puss In Boots’ Will Top $33.6M This Weekend, Jeff Katzenberg Predicts

UPDATE, 2:25 PM: DreamWorks Animation shares jumped all over the place in after-hours trading when the company reported its earnings — but settled at -2% as CEO Jeff Katzenberg discussed his expectations and plans. He talked up Puss In Boots, predicting that it will set a record this weekend by generating more than $33.6M at box offices — that’s the previous high for a pre-Halloween release. “Anything beyond that goes into the ‘win’ column,” he says. Much of the revenue will come from sales of high-priced tickets for the 3D version. “Almost every review (of the movie) singled out the quality of the 3D experience,” Katzenberg says. “It’s meaningful.” He provided few details about his recent agreement to offer his films to Netflix instead of HBO in the premium TV window but calls the new arrangement “historic” for DreamWorks as well as “the industry as a whole.” Katzenberg was equally vague about the company’s thoughts about negotiating a new distribution deal to replace the one with Paramount that expires at the end of next year. “We will be considering all our distribution options starting in spring of 2012,” he says adding that he expects to have something in place next summer. Katzenberg says that DreamWorks has paid about $700M in distribution fees for 11 movies that generated $5.5B at worldwide box offices, and $10B from sales in all venues.

Asked about the changes in his employment contract, Lew Coleman … Read More »

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DreamWorks Animation’s 3rd Quarter Boosted By ‘Shrek Forever After’

The film’s international rollout helped lift third quarter results for DreamWorks Animation. The company reported total revenue of $188.9 million and net income of $39.8 million, an increase over the same quarter last year (in which it registered revenue of $135.4 million and net income of $19.6 million). Shrek Forever After, which was released on May 21, contributed $120.4 million of revenue in the quarter, mainly from overseas. In total, it grossed $238 million domestically and $497 internationally, making it the company’s highest ever international performer. In the 4th quarter, DreamWorks Animation will be releasing Megamind on November 5 and Shrek Forever After on DVD and Blu-ray on December 7. How To Train Your Dragon was released on DVD and Blu-Ray on October 15.

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DreamWorks Animation Announces $150M Share Repurchase; Company Claims 2010 Will Be Biggest Box Office Year Yet

DreamWorks Animation SKG, Inc. today announced financial results for its second quarter ended June 30th that shows profits declined 6.2%. Without a new home entertainment DVD in the marketplace, costs outpaced box office gains since the theatrical release of films is the most expensive time of their sales cycle. Total revenue was $158.1 million and net income of $24.0 million, or $0.27 per share on a fully diluted basis. “Our strong second quarter was driven primarily by the blockbuster performances of Shrek Forever After and How to Train Your Dragon, two of the top 10 films of 2010 on both a domestic and a worldwide basis,” said CEO Jeffrey Katzenberg. “We have once again surpassed $1 billion in worldwide box office and with Megamind still to be released on November 5th, we are on track to make 2010 not only DreamWorks Animation’s single biggest year at the box office, but also the biggest year ever for any CG animation studio.”

The Company also announced today that its Board of Directors has approved a new $150 million share repurchase program. For the six months ended June 30, 2010, the Company has repurchased approximately 3.1 million shares for approximately $111 million. I’ve previously reported that Katzenberg has been shopping DWA to several Big Media companies.

Shrek Forever After, which was released on May 21, 2010, contributed $51.8 million of revenue in the quarter, generated by its domestic box office performance as well as merchandising and licensing … Read More »

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