DreamWorks Animation Reports Better-Than-Expected Revenue, But Shares Fall
Due to its restructuring, the studio run by CEO Jeffrey Katzenberg also revealed Thursday it has taken a $31.9 million charge.
DreamWorks Animation said it lost 25 cents per share in the first quarter, but with the cost of a well-publicized restructuring the studio lost 64 cents per share, a bigger loss than Wall Street had expected. Revenue was $166.5 million, which exceeded expectations.
Analysts had expected the company to post a per-share loss of 45 cents in the first quarter, an improvement over a 51-cents-per-share loss in the same quarter a year earlier. Revenue was supposed to rise to $165 million from last year's $147 million.
Investors weren't satisfied with the financial results, and shares of DWA were sinking 8 percent during the after-hours session after closing the day down 2 percent to $26.06.
Due to its restructuring, the studio run by CEO Jeffrey Katzenberg also revealed Thursday it has taken a $31.9 million charge. When it's all said and done, DWA will rack up charges of about $290 million for its restructuring, and it will result in a savings of about $60 million per year beginning in 2017.
The company has been laying off employees, and it said it will scale back its output to two movies per year, starting in 2016. The restructuring also included new leadership, with producers Bonnie Arnold and Mireille Soria installed as the heads of feature animation.
Other big changes in the quarter included the sale of the company's Glendale campus for $185 million and a concurrent leaseback from the new owner, as well as an amended credit facility, which increased from $400 million previously to $450 million.
The studio's most recent release was Home. In 2016, it will release Trolls and Kung Fu Panda 3.
While the company has had to deal with a string of money-losers lately, it appears that Home could turn a profit. The movie contributed just $2.9 million in revenue during the quarter, but the studio said Thursday that it anticipates that distributor Fox "will recoup their marketing and distribution costs and begin reporting revenue to DWA in the second quarter."
Home was released theatrically on March 27 and has reached $154 million domestically thus far and nearly that much internationally.
"While 2015 is a transitional year for us, the worldwide box-office performance of Home serves as early evidence that the changes we're making in the core feature-animation business are working," Katzenberg said Thursday.
How to Train Your Dragon 2 contributed $41.4 million of revenue in the first quarter, while Mr. Peabody & Sherman contributed $31.5 million. Turbo was good for $12.3 million and Penguins of Madagascar for $2 million.
Library titles contributed $37.9 million during the quarter.
The company's TV segment brought in $18 million, its consumer products division $15.1 million and its new-media segment $4.6 million.