Los Angeles Business Journal

DreamWorks Loss Wider Than Expected

By Business Journal Staff Tuesday, April 29, 2014

Box office turkey “Mr. Peabody and Sherman” contributed to DreamWorks Animation SKG Inc. reporting a much wider first quarter loss than analysts expected on Tuesday.

The Glendale animation studio reported a net loss of $43 million (-51 cents a share) for the quarter ending March 3, compared with net income of $5.6 million (7 cents) in the same period a year earlier. Revenue increased 9 percent to $147.2 million.

Analysts on average expected net income of -14 cents on revenue of $137.2 million, according to Thomson Financial Network.

The studio took a $57 million write down on “Mr. Peabody and Sherman,” which was released in theaters in early March and grossed $261 million at the worldwide box office. The write down was partially offset mitigated by a $22.5 million income tax benefit recorded in the quarter.

DreamWorks Animation Chief Executive Jeffrey Katzenberg acknowledged the film’s poor performance is evidence of challenges in the company’s feature film segment – which needs to be turned around.

"Our next film is ‘How to Train Your Dragon 2’ (in June), and I am confident that its performance will put us back on-track,” Katzenberg said in a prepared statement.

Shares closed down 12 cents, or about half a percent, to $26.37 on the Nasdaq.