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Jeffrey Katzenberg Says ‘Turbo’ Franchise Will Be Profitable Even Though The Film Isn’t

By | Tuesday February 25, 2014 @ 2:32pm PST

The DreamWorks Animation CEO still has a lot invested in snails — with Netflix carrying the studio’s animated series Turbo FAST — and says the film’s failure doesn’t mean the TV show will skid off track. TurboWe believe the overall Turbo franchise…will be a successful and profitable piece of business for years to come,” Jeffrey Katzenberg told analysts in a call to discuss Q4 earnings. He noted that Netflix says Turbo FAST is “one of the most popular kids series ever on their platform.” The DWA chief called the $13.5M writedown on the film “a modest impairment charge” needed because it “fell short of our expectations,” especially overseas. But the loss stung: When an analyst said it was small enough to constitute a rounding error he fired back that “it’s not a rounding error for us,” adding that the company wants to be transparent. Distributor Fox will recoup its costs for Turbo in the current quarter. The spinoff TV series may still complicate DWA’s 2014 financials. It expects to deliver a big slug of episodes to Netflix in Q4 and will have to rev up spending to market them. But DWA said that will pay off in 2015: It raised its TV revenue forecast for next year to more than $250M from more than $200M.
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DreamWorks Animation Takes $13.5M Charge For ‘Turbo’ As Q4 Earnings Lag Analysts’ Estimates

By | Tuesday February 25, 2014 @ 1:08pm PST

So much for CEO Jeffrey Katzenberg’s prediction that Turbo would be profitable.dwa DreamWorks Animation‘s shares are down 5.6% in post-market trading after releasing a Q4 earnings report that includes a $13.5M impairment charge, equal to 12 cents a share, for the film, which the company attributes to “its performance during the last two months of the quarter.” DWA took an additional $6.7M charge, worth 6 cents a share, mostly for a Rocky & Bullwinkle short the studio hoped to run before Mr. Peabody And ShermanDreamWorks 1. Still, the bottom line looks better than the it did in the same quarter in 2012, when it took an $87M charge for Rise Of The Guardians. The company generated net income of $17.2M vs a loss of $82.7M the previous year on revenues of $204.3M, -22.8%. Analysts anticipated a top line of $227.1M. Earnings, at 20 cents a share, also missed forecasts for 33 cents. DWA didn’t give year-over-year comparisons for the results at each of its divisions. It says that feature films contributed $127.9M in revenue — including $46.8M from library titles –with a gross profit of $53.4M. Television saw revenues of $47.1M with a $7.3M gross profit. Consumer Products generated $12.4M in revenue with a $2M gross profit. And other businesses had $16.8M in revenue with $2.3M in gross profit, mostly from streaming rights to Shrek The Musical. … Read More »

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Are Investors Too Optimistic About DreamWorks Animation?

Morgan Stanley analyst Benjamin Swinburne thinks so, sticking with his bearish case today following a year when the studio’s stock soared 114% to $35.50. dreamworksanimation__130215140931He raised his target price this morning — but just to $31, which is why he still has an “underweight” recommendation for the stock. The market’s current valuation only makes sense, he says, if DreamWorks Animation beats his film box office forecasts by as as much as 15%, or TV revenues come in 70% higher than he envisions or consumer products beat his expectations by 80%. Looked at another way, DWA would have to generate about $400M in cash flow this year, ahead of his projection for about $310M. After deals with Netflix and others designed to make DWA a TV production power “We suspect the market is overestimating the impact of television and [consumer products] growth while underestimating the importance of film performance” which still accounts for more than 70% of gross profits, Swinburne says. He remains skeptical DWA can fulfill the Street’s extravagant expectations even though he’s warmed somewhat to its prospects. He no longer expects CEO Jeffrey Katzenberg to take a $10M writedown on Turbo, and raised his box office forecast for How To Train Your Dragon 2 by $20M “primarily on a strong international outlook.” Still, he’s concerned that in November Lionsgate’s The Hunger Games: Mockingjay Part 1 comes out just a few days Read More »

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Netflix Will Introduce ‘Turbo FAST’ On December 24

By | Tuesday December 3, 2013 @ 6:27am PST

LOS ANGELES, Dec. 3, 2013 — Turbo and his Fast Action Stunt Team are challenging the world to “snail up!” as they make their global television debut on Christmas Eve – netflix_logo__121008075714-200x92__130701074658Tuesday, December 24th at 12:01 AM PST – with the launch of DreamWorks Animation’s all new Turbo FAST series, exclusively in all Netflix territories. Families will be able to stream the first five episodes this holiday season, with additional all new episodes premiering throughout the year.

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DreamWorks Animation Shares Hit 3-Year High As Short Sellers’ Bets Go Sour

By | Wednesday October 30, 2013 @ 12:06pm PDT

I expected shares to be up after yesterday’s report, where Q3 revenues and profits soundly topped analyst expectations. But I didn’t think DreamWorks Animation would be +18% in afternoon trading, after touching $33.02 — the highest it’s been since September 2010. What’s going on? “It looks like a short squeeze” — the aftermath of bet by short sellers that went bad — says Sterne Agee’s Vasilly Karasyov. Short sellers profit when a company’s stock price drops: They borrow shares, sell them, and then repurchase them at what they hope will be a lower price. That looked like a safe gamble for DWA. Its stock had appreciated 40% over the 12 months ending yesterday. And it appeared ready to fall as some analysts projected that the studio would have to report an impairment charge for its summer release, Turbo, a box office disappointment. Janney Capital Markets’ Tony Wible — one of just two analysts urging investors to buy the stock — says DWA is “a hated name [on Wall Street] with a high short position.” If the company beat expectations, though, it would be “the recipe for a big boost that is likely aided by short covering.” And DWA did surprise.

Related: DreamWorks Animation Shares Slip After Analyst Lowers ‘Turbo’ Forecast

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Jeff Katzenberg: ‘Turbo’ Will Be Profitable

By | Tuesday October 29, 2013 @ 3:21pm PDT

It’s a low bar. But the projection by the DreamWorks Animation CEO in a conference call with analysts should reassure investors who feared that the company would have to record an impairment charge for its summer release about a snail who dreams about competing in the Indy 500. The film, which cost about $127M to produce, has generated about $246.1M from worldwide box offices — far below early expectations. Fox is still recouping its distribution costs. As a result, DreamWorks Animation recognized just $6.4M from the film in Q3 largely from China and South Korea, where Fox is not the distributor. Jeffrey Katzenberg said in July that he expected Turbo to turn a profit, especially in overseas markets where it had yet to open and would face less competition than it did in the U.S. But with DWA’s continuing box office disappointments, Janney Capital Markets’ Tony Wible said last week that the company “may take as much as a $90M impairment on Turbo.” B. Riley analyst David Miller was slightly more optimistic, saying the studio might take a loss of as much as $19M. “Suffice it to say, it’s going to be very close,” he said. Miller last month lowered his global box office estimate for Turbo by 22.6% and cut his 2013 earnings estimate for DWA by 27.1% to 70 cents a share. COO Ann Daly says that revenues will still come in from the … Read More »

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DreamWorks Animation Shares Slip After Analyst Lowers Forecast For ‘Turbo’

By | Monday September 23, 2013 @ 10:10am PDT

The company’s had a strong run lately following better-than-expected box office sales for the March release The Croods, and potentially lucrative TV production deals with Netflix and Super RTL. DreamWorks Animation shares are up more than 17% over the last two months and 55.5% over the last five. But the bull run may be over, B. Riley & Co’s David Miller says today. DWA’s stock price is down 4.5% to $28.24 in mid-day trading after the analyst changed his recommendation to “neutral” from “buy.” “Despite our best attempts at stretching the rubber band further, we simple cannot justify a higher price target at this juncture” from his current price of $29. He lowered his global box office estimate for DWA’s Turbo by 22.6% to $395M ahead of its debut in major markets including the UK, Germany, France, Spain, Holland, and New Zealand. The film about a snail that becomes an Indy 500 speedster cost about $130M to produce which means it “will be profitable, but less so in comparison to past iterations of our working models” for DWA releases. Miller cut his 2013 earnings estimate for DWA by 27.1% to 70 cents a share. He adds that at Friday’s closing price of $29.58 DWA was more expensive than Lionsgate based on multiples of cash flow and earnings.

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Jeffrey Katzenberg Says ‘Turbo’ Fell Short Of Expectations But Will Be Profitable

By | Wednesday July 31, 2013 @ 3:55pm PDT

The Dreamworks Animation CEO attributes his movie’s problems to an “oversaturated marketplace” as the release was overwhelmed by family friendly competition. “We hit a perfect storm here,” Jeffrey Katzenberg told analysts in a call to discuss Q2 earnings. The release on July 17 “was just a bad date.” This summer included 50% more tentpole releases than in the same period last year, he says. What’s more, “we’ve seen more animation this summer by about 100% than we’ve ever seen before.” That “caused us to fall short of our expectations.” But he says that Turbo ”will be profitable” after Q3. There’s “still upside for Turbo domestically” where it has generated more than $60M at box offices. It’s a let down because “our movies are $150M to $200M grossing movies. In the real world, a movie in the vicinity of $100M is still considered a hit.” The company says that Turbo cost about 20% less than Rise Of The Guardians, which required a $87M writedown. Katzenberg also says that Turbo likely will be a hit overseas, including markets where it will face less competition when it opens. He adds that DWA’s upcoming movies including Mr. Peabody & Sherman and How To Train Your Dragon 2 won’t have the same problems. “We have a very clear path as to what 2014 looks like and pretty much so for 2015,” Katzenberg says. “The good news … Read More »

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DreamWorks Animation Shares Hit Speed Bump After Weak ‘Turbo’ Opening

By | Monday July 22, 2013 @ 9:04am PDT

The stock is down 7% midday as investors try to determine how much, or little, DreamWorks Animation can expect from Turbo following its weaker-than-expected $31.1M domestic opening weekend box office results. “Investors will probably shoot first and ask questions later given the domestic performance,” says Stifel analyst Benjamin Mogil — who just lowered his domestic box office estimate for the film by 33.3% to $90M with international -9.1% to $300M.  Everyone acknowledges that the overseas results will be key. Turbo won’t open in China until the end of Q3, and won’t hit most of Europe until Q4. As a result, Cowen & Co’s Doug Creutz says he doesn’t expect DWA to announce a write-down for Turbo when the company releases its Q2 earnings in two weeks — although “a write-down remains possible over the next few quarters.” He just lowered his earnings estimate for the company’s fiscal year by 11.1% to 64 cents. Sterne Agee’s Vasily Karasyov warns that DWA may have to take a $19M write-down in Q4, as he lowered his domestic estimate for Turbo to $70M from $160m. If he’s right, he says, then it may suggest that the company has larger problems that could jeopardize next year’s original releases Peabody and Sherman and Happy Smekday. Lazard Capital’s Barton Crockett is more hopeful. He just raised his international box office estimate for Turbo by 10% to $351M observing that this weekend’s results in countries including Russia, Mexico, Brazil, Argentina … Read More »

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#1 ‘The Conjuring’ Scares Up $41.5M Weekend But Other New Films Sink Or Soft: ‘R.I.P.D.’, ‘Turbo’, ‘Red 2′, As Sizzling Summer Fizzles

By | Sunday July 21, 2013 @ 7:38am PDT

SUNDAY 7:30 AM,  3RD UPDATE: Sizzling Summer 2013 is now fizzling, and $200M total moviegoing this domestic weekend was down -20% from last year. Hollywood was especially glum while the media was annoyingly gleeful over more big-budget movies bombing. Bad news for every new film except Warner Bros/New Line’s low-budget The Conjuring (playing in 2,903 theaters) which opened #1 with a good news $41.5M weekend. It also received from audiences a coveted ‘A-’ CinemaScore, an unusually good grade for the genre where ‘D’ and ‘F’ have become commonplace from fed-up audiences.

Going into Friday, the $20M-cost The Conjuring was Fandango’s top ticket seller among four new releases across online and mobile platforms. Warner Bros early on credited director James Wan with making “both an incredibly scary film but also a very well-made quality movie” that likely becomes a badly needed fresh franchise for New Line. Clearly, Wan (Saw, Insidious) was able to transition from gore to the bizarre and now to the supernatural helped by talented cast Vera Farmiga, Patrick Wilson, Lili Taylor, and Ron Livingston and credited screenwriters Chad Hayes and Carey W. Hayes. Producers are Tony DeRosa-Grund, Peter Safran, and Rob Cowan. The marketing campaign kicked off a month ago at the LA Film Festival. “It was an unusual strategy in that it exposed the film to critical reaction at a very early stage,” Warner Bros Pictures President of Worldwide Marketing and International Distribution Sue Kroll tells me. “But our faith … Read More »

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Deadline Awards Watch With Pete Hammond, Episode 35

By | Thursday July 18, 2013 @ 2:58pm PDT
Pete Hammond

Listen to (and share) episode 35 of our audio podcast Deadline Awards Watch With Pete Hammond. Deadline’s awards columnist talks with host David Bloom about today’s Emmy nominations announcements, looking at the big winners and some surprises, including American Horror Story, 30 Rock, The Big Bang Theory, Behind The Candelabra, Mad Men, Phil Spector, Homeland and the Netflix newcomer House Of Cards. Pete and David also discuss the week’s movies, a very full slate of major releases that includes the geezer spy action-comedy Red 2, old-school chiller The Conjuring, Nicholas Winding Refn’s violent reunion with Ryan Gosling Only God Forgives, the unscreened-for-critics R.I.P.D. and sweet-natured snail tale Turbo.

Deadline Awards Watch, Episode 35, (MP3 format)
Deadline Awards Watch, Episode 35, (MP4a format) Read More »

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‘Turbo’ Opens Slowly Wednesday Ahead Of Crowded Worldwide Box Office Weekend

By | Thursday July 18, 2013 @ 4:45am PDT

THURSDAY 4 AM: Get ready for a wacky weekend when four major studio releases will be joining an already crowded marketplace. Good thing DreamWorks Animation and Twentieth Century Fox turned on the ignition to rev Turbo into the domestic box office race on Wednesday. This non-sequel original story opened #1 with $5.8M into 3,552 theaters and received a coveted ‘A’ CinemaScore which should help word of mouth by Friday. The 3D toon was followed close behind by Universal/Illumination’s three-week-old 3D toon Despicable Me 2 ($5.6M last night but on its way to $500M worldwide today), #3 Sony/Happy Madison’s Grown-Ups ($4.3 for a $55.8M North American cume) and #4 Warner Bros/Legendary’s Pacific  Rim ($3.5M and passing $100M worldwide). Sorry to repeat myself, but tracking has been unreliable this summer just as it’s been for some time now. But that hasn’t stopped all those morons at other media outlets from declaring ‘bombs’ before the movies have even opened in a theater. (Variety’s headline was the worst - ”Two Ryan Reynolds Misfires in One Weekend?” – with writer Andrew Stewart telling Hollywood that his editor Claudia Eller is responsible for it.) Shameful. That said, no one’s quite certain how much the $135M-costing snail comedy can gross over the next 5 days with Gru and his minions still creating mucho mayhem in the market. Rival studios feel producer Lisa Stewart and story scribe and director David Soren who scripted with Darren Lemke and Robert Siegel put together a very … Read More »

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Hot Trailer: DreamWorks Animation’s ‘Turbo’

By | Tuesday July 2, 2013 @ 11:36am PDT

DreamWorks Animation is putting a lot of muscle behind Turbo, about a snail that feels the need for speed: The studio is doing an animated series for Netflix based on the property, and in May hooked up with the Indianapolis 500. That’s to help keep the momentum going after its success with The Croods in March. Ryan Reynolds, Paul Giamatti, Michael Pena, Bill Hader, Richard Jenkins, Ken Jeong, Michelle Rodriguez, Maya Rudolph, Snoop Dogg, and Samuel L. Jackson lead the voice cast. The Fox release opens July 17:

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Latest ‘Turbo’ Trailer Tied To Indy 500 Race

By | Friday May 24, 2013 @ 7:25pm PDT

The Indianapolis 500 will be broadcast Sunday on ABC. But this DreamWorks Animation toon’s 2nd phase trailer waits what seems like an interminable time for the tie-in. David Soren writes and directs Turbo about a snail that feels the need for speed. Scripted with Darren Lemke and Robert D. Siegel, its voice cast includes Ryan Reynolds, Paul Giamatti, Michael Pena, Bill Hader, Richard Jenkins, Ken Jeong, Michelle Rodriguez, Maya Rudolph, Snoop Dogg, and Samuel L. Jackson. The Fox release opens July 19th:

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DreamWorks Animation Plans Indoor Theme Parks In Three Russian Cities

By | Friday February 15, 2013 @ 6:35am PST

After announcing in August that it plans to open a theme park in Shanghai by 2016, DreamWorks Animation today unveiled plans for Russia. The company has partnered with property development and management firm Regions GC to build what is promised to be Europe’s largest indoor theme parks. The attractions in Moscow, St. Petersburg and Yekaterinburg are expected to be completed in 2015 and are planned as year-round “entertainment zones” — the indoor placement designed to avoid weather being an issue.

Each complex will incorporate a movie and concert hall, 4D movie theater, three-star 400-room hotel and retail space. DreamWorks Animation properties to be featured include Shrek, Madagascar, How To Train Your Dragon, Kung Fu Panda and the upcoming garden snail adventure Turbo, which will bow in Russia on July 11 ahead of its U.S. debut.

Russian box office jumped 8% in 2012 for over $1.2B in takings and DWA movies are popular there. Madagascar 3: Europe’s Most Wanted is the second-highest-grossing animated film in Russian history and the fourth-biggest film of all time. “Russia is one of the most important markets in the world for us,” said CEO Jeffrey Katzenberg. “All of us at DWA are extremely excited to work with Regions CG to be the first Hollywood studio to create not just one, but three, theme parks in Russia.” Read More »

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DreamWorks Animation To Produce First Netflix Original Series For Kids

By | Tuesday February 12, 2013 @ 6:35am PST

Up to now execs at cable networks such as Nickelodeon that syndicate their kids shows to Netflix say the streamed viewing doesn’t cannibalize conventional TV watching. But we’ll see whether they’re as forgiving in December when Netflix introduces its first original kids show, Turbo: F.A.S.T. (Fast Action Stunt Team) – based on DreamWorks Animation‘s upcoming theatrical film Turbo in the U.S. and 40 other countries. “Netflix boasts one of the largest and fastest-growing audiences in kids television,” DreamWorks Animation CEO Jeff Katzenberg says. “They pioneered a new model for TV dramas with House Of Cards, and now together, we’re doing the same thing with kids’ programming. DreamWorks is thrilled to be part of the television revolution.” Netflix’s Chief Content Officer Ted Sarandos says that  ”creating an original series for kids was a natural for us. And we’re doing it in a big way by adapting Turbo, this year’s DreamWorks Animation summer tentpole movie.” The announcement comes as the studio’s movies shift from HBO to Netflix for showing in the premium TV window. Read More »

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Hot Trailer: ‘Turbo’

By | Thursday December 20, 2012 @ 6:06pm PST

A snail that yearns for speed gets his wish in this DreamWorks Animation toon. David Soren directs Turbo, which is written by Darren Lemke, Robert D. Siegel and Soren. The impressive voice cast includes Ryan Reynolds, Paul Giamatti, Michael Pena, Luis Guzmán, Bill Hader, Richard Jenkins, Ken Jeong, Michelle Rodriguez, Maya Rudolph, Ben Schwartz, Kurtwood Smith, Snoop Dogg, and Samuel L. Jackson. The Fox release opens July 19th.

WATCH IT ON YOUTUBE: DreamWorks Animation’s Turbo – Official Trailer #1

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DreamWorks Animation’s Release Schedule

By | Sunday September 9, 2012 @ 5:52pm PDT

The following DreamWorks Animation films will be distributed by Fox:

The Croods - March 22, 2013
Turbo – July 19, 2013
Mr. Peabody & Sherman - November 1, 2013
Me And My Shadow – March 14, 2014
How To Train Your Dragon 2 – June 20, 2014
Happy Smekday! – November 26, 2014
The Penguins Of Madagascar – March 27, 2015
Trolls (working title) – June 5, 2015
B.O.O.: Bureau of Otherworldly Operations – November 6, 2015
Mumbai Musical (working title) – December 19, 2015
Kung Fu Panda 3 – March 18, 2016
How To Train Your Dragon 3 – June 18, 2016

Related: DreamWorks Animation To Fox For 5-Year Distribution Deal
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DreamWorks Animation Forges Alliance With Racing Groups To Support ‘Turbo’

By | Monday March 12, 2012 @ 5:00am PDT

EXCLUSIVE: Jeffrey Katzenberg’s company struck a licensing arrangement with IndyCar — the organization that sanctions major races including the Indianapolis 500 — and the Indianapolis Motor Speedway to secure their help with the 2013 release. Turbo is about a garden snail that idolizes 5-time Indy 500 champ Guy Gagne and tries to win the race after a freak accident gives it extraordinary speed. DreamWorks secured rights to use the racing group’s trademarked names and images by agreeing to buy an undisclosed amount of ad time on its broadcasts and at racing venues, IndyCar CEO Randy Bernard tells me. His group will announce later some of the specific drivers who will be depicted in the film. “The Indianapolis 500 is a one-of-a-kind live event that has fascinated people of all ages for many, many years and Turbo is a character whose biggest ambition is to add his name to its list of international champions,” says Katzenberg, Dreamworks Animation’s CEO. The deal appealed to the racing organization, Bernard says, because “we’re trying to grow a business around the world. We look at this as an international film that will bring presence to IndyCar” especially among young audiences. Read More »

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