DWA beats 1st-quarter estimates


DreamWorks Animation, leaning heavily on its "Madagascar" DVD, reported a quarterly net profit Tuesday that blew past Wall Street forecasts.

The company said first-quarter net income came in at $12.3 million, or 12 cents a share. While that is down significantly from DWA's $45.7 million year-ago figure when "Shrek 2" DVDs were flying off store shelves, it handily beat the penny-per-share analyst average estimate.

Revenue, at $60.1 million, down from $166.9 million in the year-ago frame, also topped analyst forecasts.

DreamWorks shares, which dipped 2.8% during the regular trading session, recovered nearly all of that loss in the after-hours session once earnings results were released.

DWA chief financial officer Kris Leslie said that "Madagascar," which so far has shipped 17.5 million DVDs worldwide, contributed $30.7 million in revenue during the quarter.

"Shark Tale" generated $13.1 million in revenue via DVD sales and international pay television while the company's library titles contributed $16.3 million, Leslie said.

As anticipated, "Wallace and Gromit: The Curse of the Were-Rabbit" and "Shrek 2" did not contribute revenue in the first quarter as the company has not yet fully recouped its marketing and distribution costs for those titles.

The company's next release, "Over the Hedge," due May 19, will be the primary driver of revenue this year, Leslie said, though much of the profits from that film might not be recognized until next year.

Leslie, along with DWA president Lew Coleman, was careful not to raise boxoffice expectations for "Hedge." "It is a very competitive time to be releasing a film," Coleman told analysts, not only because of a crowded summer schedule of releases but also because it goes head-to-head with World Cup soccer in Europe.

While refusing to make predictions about specific movies, Coleman said he is enthusiastic about the potential of Paramount to market DWA movies via its sister TV asset the Nickelodeon channel. "Hedge" will be the first DWA film distributed by Paramount, which recently bought the DreamWorks SKG live-action studio.

DWA has been a bit gun shy about the guidance it offers Wall Street since it surprised investors a year ago with news that retailers were returning large numbers of unsold "Shrek 2" DVDs, an event that sparked an inquiry from the U.S. Securities and Exchange Commission.

"Obviously," Coleman said in an interview after Tuesday's conference call, "the only thing you need to guide is what you think these movies are going to do, and our belief is that movies are too hard to predict."

Coleman also said that his company took note of the success 20th Century Fox has had with "Ice Age: The Meltdown." Released on March 31, an unusual time for animated family films, which traditionally enjoy summer or Christmas release dates, the movie has grossed more than $177 million.
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