DreamWorks Animation SKG Inc. posted lower-than-expected first-quarter earnings as DVD and video sales of "Shrek 2" fell short of its expectations.
After markets closed on Tuesday, the Glendale-based digital animation feature film company, reported net income of $45.7 million (44 cents per diluted share) for the first quarter ended March 31, compared with a loss of $25.5 million (33 cents) for the like period a year earlier. Revenue rose to $167 million from $41 million in the year-ago period.
Analysts had forecast earnings of 58 cents per share on revenues of $175.2 million.
The company said the year-over-year increase in profit and revenue was mainly driven by sales of its animated movie "Shark Tale," which generated nearly $142 million in revenue in worldwide theatrical release and home video. To date, the film has amassed over $365 million worldwide, beating the company's previous estimate of $350 million.
But "Shrek 2," despite robust sales of the home video, did not meet the company's retail sales expectations for the first quarter. As a result, DreamWorks Animation said it did not record any revenue from "Shrek 2" in the quarter, other than from licensing and merchandising.
"While we firmly believe that the 'Shrek' franchise continues to be very strong, it is clear in retrospect that the unique blockbuster characteristics of 'Shrek 2' caused us to overestimate first quarter retail sales," said Jeffrey Katzenberg, DreamWorks Animation's chief executive, in a press release.
For the full year, the company anticipates earnings in the range of $1 to $1.25 per share. Much of this activity is expected to come in the fourth quarter.
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