Analyst: DreamWorks Could Take $50 Million Charge on 'Turbo'Monday, July 22, 2013
Shares of DreamWorks Animation SKG Inc. fell nearly 5 percent Monday after an analyst said the company’s movie “Turbo” could cause a $50 million write down.
The Glendale studio’s latest film, about a snail that can move as fast as a race car, earned an estimated $21.5 million on its opening weekend, according to the website BoxOfficeMojo.com. The early performance of “Turbo” is similar to that of “Rise of the Guardians,” the DreamWorks film released in November that led to an $87 million write down.
James Marsh, an analyst at Piper Jaffray in New York, wrote in a note to investors that DreamWorks could have to absorb as much as $50 million in losses based on the production and marketing costs for “Turbo.”
“While reviews have been positive for the film and could help build word of mouth, at this stage we think it will be lucky to hit $100 million in the current competitive environment,” the note stated.
Shares of DreamWorks closed Monday down $1.13 or 4.5 percent to $23.77 on the Nasdaq.