DreamWorks Ani Q2 earnings down from '09
$25 million cost increase ate into profitsDespite growing revenue, DreamWorks Animation earned 6% less in its second quarter than it did in the same frame a year ago as rising costs ate into profits, the company said Tuesday.
DWA earned $24 million on revenue that rose 20% to $158 million. The financial results surpassed expectations and the stock rose more than 3% in after-hours trading after gaining 1% to $32.08 during the regular session.
The company also said its board has authorized a new $150 million stock buyback program.
The revenue increase came courtesy of "Shrek Forever After" and "How to Train Your Dragon," both of which are hit movies by any standard even though they were viewed early on as mild disappointments for the animation studio.
Company CEO Jeffrey Katzenberg boasted of 13 DWA hits in a row and predicted 2010 would be the studio's biggest boxoffice year. He wasn't exactly going out on a limb, considering DWA will release three films this year, more than any CG-animated studio has before.
Still to come this year is "Megamind" on Nov. 5 featuring Brad Pitt, Will Ferrell, Jonah Hill and Tina Fey.
An analyst on Tuesday noted that Pitt and his marketing power were absent from the Comic-Con panel discussion last week that featured the three other stars, and he asked Katzenberg whether it's worth it to hire high-priced actors to voice animated characters.
"The value of these stars first and foremost to us is in how good they are at doing their work," Katzenberg said. He added: "We expect all of the talent will support the release of the film, including Brad."
Katzenberg also joked that "we did actually have a full-size cut-out of Brad Pitt in attendance, which he strongly supported."
Ann Daly, DWA's COO, said that the industry's falling number of DVD releases -- primarily TV titles, as retailers become choosier about what to allocate shelf space to -- has been good for DWA. Katzenberg added that the erosion in DVD sales of late has ended.
"We've seen stability for our product in the last two years; now the rest of the market seems to have stabilized also," he said.
Speaking to The Hollywood Reporter after the conference call, Katzenberg predicted that 3D television sets without the need for special glasses are 6-10 years away and theatrical 3D sans glasses won't see the light of day for another decade beyond that, but consumers won't mind.
"The stigma of glasses is yesterday's news," he said.
Katzenberg refused to address rumors that he is shopping DWA to Universal -- or anywhere else-- or that he'd be interested in running that studio.