DreamWorks Animation Takes $57M Impairment Charge on 'Mr. Peabody & Sherman'
UPDATED: "Restoring the strength in our core business is my No. 1 priority today," says CEO Jeffrey Katzenberg.
DreamWorks Animation took a $57 million impairment charge because of a lackluster box-office performance from Mr. Peabody & Sherman, a $145 million film that earned $261 million worldwide since opening March 7.
The company's announcement Tuesday coincided with weak financial results. The company said it lost $42.9 million, or 51 cents a share, in the first quarter on revenue of $147.2 million.
In the same quarter a year earlier, the company posted net income of $6.1 million, or 7 cents a share, on revenue of $134.6 million.
"The box-office shortfall of Mr. Peabody & Sherman is evidence of the current challenges we face within our feature film segment, and restoring the strength in our core business is my No. 1 priority today," said DreamWorks Animation CEO Jeffrey Katzenberg.
On Monday, Katzenberg was striking a similar theme, telling an audience at the Milken Institute Global Conference that the movie industry is rapidly changing and that he can't get further into TV and foreign markets fast enough, in particular China.
"Diversification right now is necessary for us if we want to grow the business," Katzenberg said Monday.
DreamWorks Animation stock closed 12 cents lower on Tuesday to $26.37, but shares were sinking as much as 7 percent after the closing bell when financial results were released.
In the first quarter, Turbo contributed $22.3 million in revenue, primarily from domestic pay TV, while The Croods added $41.7 million mostly through pay TV and DVD sales.
Rise of the Guardians and Madagascar 3: Europe's Most Wanted contributed $3.4 million and $1.8 million, respectively, mostly by way of DVD sales.
Library titles added $37.9 million in revenue during the quarter, and television was good for $17.9 million, mostly from Classic Media and the Cartoon Network show DreamWorks Dragons: Riders of Berk.
Consumer products contributed $7.1 million in revenue during the first quarter.