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 »
UPDATE, 11:16 AM: “Sizable” layoffs are coming. It’s just a matter of how many, and when. DreamWorks Animation may cut up to 500 employees in the next few months, sources tell Deadline. That’s potentially 23% of its 2200-strong animators, tech, and support staff, axed in the wake of a flop and key release date changes for Mr. Peabody And Sherman (moved off the 2013 calendar and into 2014) and Me & My Shadow (sent back into development). Those calendar shifts created a workload deficit for the studio, which will have to trim production staff as a result. Just last month, DreamWorks Animation made Fortune’s Best Companies To Work For list.
PREVIOUSLY, TUESDAY PM: On Tuesday, distributor Fox delayed DreamWorks Animation’s 3D pic Mr. Peabody and Sherman to spring 2014, reducing the company’s 2013 slate from three wide releases to two. At the same time, Me & My Shadow, an animation planned for 2014 featuring the voices of Kate Hudson, Josh Gad, and Bill Hader, was taken off the schedule altogether and reverted into development. “[We] are adjusting our operating infrastructure costs accordingly,” CEO Jeffrey Katzenberg said in a statement.