DreamWorks Animation SKG Inc. on Thursday said fourth-quarter earnings plunged more than two-thirds from a year ago as "Wallace & Gromit: The Curse of the Were-Rabbit" underperformed at the box office.
The Glendale-based animated film studio reported fourth-quarter net income of $63 million (61 cents per share), compared with $192 million ($1.99) for the same period a year earlier. Revenue fell 65 percent to $172 million from $495 million in the year-prior period, when "Shrek 2" was released on home video.
Analysts had expected earnings of 42 cents per share on revenue of $173 million.
Fourth-quarter revenue was mainly driven by the home video sales of "Madagascar," which generated approximately $152 million of revenue. "Shark Tale" contributed $5.7 million in the quarter and the remaining revenue came from the company's library and other films, which added about $15 million.
The quarter included a $25 million write-off for "Wallace & Gromit," due to lower-than-expected home video sales, which resulted in a 15-cent-per-share reduction in earnings.
DreamWorks Animation also saw a tax benefit in the fourth quarter of 27 cents per share associated with two previously discontinued film projects.
"Despite achieving critical acclaim, commercially 'Wallace & Gromit: The Curse of the Were-Rabbit' did not perform as well as expected in a highly competitive release period," said Jeffrey Katzenberg, DreamWorks Animation's chief executive, in a statement. Katzenberg added that the "film that did not achieve the level of consumer awareness that we had hoped."
Low U.S. box office sales for "Wallace & Gromit" led to a nearly 64 percent drop in third-quarter revenues from the year-ago period. That quarter included a 4-cent-per-share charge for the partial write off of film inventory for the animated film in November.
Paramount Pictures acquired DreamWorks Animation's former parent, DreamWorks SKG Inc., in a $1.6 billion deal in December.
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