Oct. 25 (Bloomberg) -- DreamWorks Animation SKG Inc., the independent film studio, said third-quarter profit fell 51 percent on shrinking home-video and box-office sales.
Net income dropped to $19.7 million, or 23 cents a share, from $39.8 million, or 47 cents, a year earlier, the Glendale, California-based company said today in a statement. That missed the 25-cent average of nine analysts’ estimates compiled by Bloomberg. Sales fell 15 percent to $160.8 million, missing estimates of $163.4 million.
“Kung Fu Panda 2,” released in May, took in $663 million worldwide, less than the $752.6 million for “Shrek Forever After,” a year ago, according to Box Office Mojo. The prior release, “Megamind” in November 2010, collected $322 million in theaters worldwide. Ticket sales often set the pattern for DVDs and pay-TV.
“There’s carryover from theatrical debut weakness,” Tony Wible, a Philadelphia-based analyst with Janney Montgomery Scott LLC, said before results were announced. “The box office sets the trend for all of the other windows,” said Wible, who has a neutral rating on DreamWorks Animation shares.
DreamWorks Animation’s next film, “Puss in Boots,” is set for release on Oct. 28 by distributor Paramount Pictures, a unit of Viacom Inc. The film is expected to generate $144 million in the U.S. and Canada, the estimate of Boxoffice.com, less than $165.2 million for “Kung Fu Panda 2.”
DreamWorks Animation fell 5.6 percent to $17.28 in extended trading. It lost 3 percent to $18.31 at the close in New York and is down 38 percent this year.
DreamWorks Animation may take over distribution of its movies when the accord with Paramount Pictures ends next year, three people with knowledge of the situation said last month.
Chuck Viane, the former head of distribution for Walt Disney Studios before retiring this year, joined DreamWorks Animation in a consulting role, the company said today.
The studio released three films last year and will have two in 2011, another reason revenue is down, Wible said.
“DreamWorks Animation’s financial results tend to fluctuate due to, among other factors, the timing of our feature film releases and the number of our films in any given year,” Lew Coleman, president and chief financial officer, said in the statement. “This is the case in the third quarter of 2011.”
--Editors: Rob Golum, Anthony Palazzo
To contact the reporter on this story: Michael White in Los Angeles at email@example.com
To contact the editor responsible for this story: Anthony Palazzo at firstname.lastname@example.org