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Friday, Feb 23, 2024

DreamWorks’ Profit Drops, Geffen to Leave Board

DreamWorks Animation SKG Inc. said that its third-quarter profit fell 21 percent on lower revenue, but the results still exceeded Wall Street’s expectations.

The animation company also announced that co-founder David Geffen was stepping down from the board.

The Glendale company said late Tuesday that net income fell to $37.4 million (41 cents per share), from $47 million (47 cents) a year ago, largely due to higher costs. Selling, general and administrative expenses rose 25 percent to $30 million, partly due to higher stock compensation costs.

Net revenue fell nearly 6 percent to $152 million despite the strong performance of “Kung Fu Panda.” The film, which DreamWorks called its most successful original film ever, so far has made more than $630 million worldwide.

Analysts surveyed by Thomson Reuters expected earnings of 32 cents per share on revenue of just over $130 million.

In a conference call with investors, Jeffrey Katzenberg, who cofounded DreamWorks with Geffen and Steven Spielberg, said Geffen was the company’s “guardian angel” and would continue to serve as a “trusted adviser.” Geffen’s departure had been rumored for months after he helped Spielberg to arrange financing and distribution deals to launch a new film company.

DreamWorks shares were down 76 cents, or 3 percent, to $26.73 in Wednesday morning trading on the New York Stock Exchange.

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