DreamWorks shares fall after movie delay
LOS ANGELES (AP) — Shares of DreamWorks fell Wednesday after the animation studio delayed the theater release of "Mr. Peabody & Sherman" by four months.
THE SPARK: The delay, to March 7 from a previous release date of Nov. 1, pushes revenue and potential profits from the film into 2014. That caused several analysts to trim their earnings estimates for 2013.
The company said that "Peabody" would be released in the spot previously planned for "Me & My Shadow," which will go back into the development process for reworking. The company said it would now release two films in 2013, "The Croods" on March 22 and "Turbo" on July 19. It will release three films in 2014 starting with "Peabody."
"Peabody" originally appeared on television as part of "The Bullwinkle Show" in the 1960, a story of a brilliant dog who has a boy for a sidekick, named Sherman.
THE BIG PICTURE: DreamWorks releases a handful of high-budget computer animated 3-D movies every year and its earnings are tied closely to each film's box-office performance.
THE ANALYSIS: Janney analyst Tony Wible reduced his estimate for earnings per share in 2013 to 35 cents from 43 previously, but bumped his 2014 estimate higher to $1.19 from $1.11. He maintained his "Buy" rating on the shares and $22 fair value estimate.
"Overall, this move will reduce 2013 and sustain the pressure on DreamWorks' earnings into next year," Wible wrote in a research note Wednesday.
The analyst also expected the company to book a loss on "Rise of the Guardians," which came out in November.
SHARE ACTION: DreamWorks Animation SKG Inc. fell 63 cents, or 3.6 percent, to $16.79 in midday trading. That's just off the 52-week low of $16.04 reached Jan. 2.