DWA report: jolly, green
'Shrek' fuels quarter; 5th pic set"Shrek the Third" led to stellar quarterly financial results for DreamWorks Animation SKG, and the studio confirmed Tuesday a fifth installment of the franchise is in the works.
DWA profit and revenue in the second quarter rolled past the most optimistic expectations of Wall Street analysts, and the stock soared as much as 7% in after-hours trading, touching a 52-week high.
The company posted $61.8 million in net income, more than 350% better than the same quarter a year ago. On a per-share basis, DWA earned 60 cents, while analysts expected 36 cents.
Revenue of $222.5 million, up from $74.9 million last year, exceeded the $151 million that analysts forecast.
"Shrek the Third" contributed $109.1 million of that revenue total on its way to raking in $320 million at domestic theaters and $400 million internationally.
"Our ogre has more than held its own," said CEO Jeffrey Katzenberg, noting that "Shrek" had stiff competition from pirates, wizards and Spider-Man.
The company also benefited from "Shrek's" first two appearances, as DWA reported that its library brought in $36 million in revenue during the quarter, primarily from DVD sales of "Shrek" and "Shrek 2."
DWA only updates its library totals annually and said at the end of last year that the former had sold more than 50 million units while the latter had exceeded 41 million.
Katzenberg said in an interview that the "Shrek" story is planned as a five-movie franchise. He also said the "Shrek the Musical" stage play should debut on schedule in fourth-quarter 2008.
As has become customary, Katzenberg talked up the opportunity presented by new 3-D technologies. He said that by the May 15, 2009, opening of DWA's "Monsters vs. Aliens," which will be released in 2-D and 3-D versions, there should be between 5,000 and 9,000 screens capable of showing 3-D films.
"Our wish would be that there would be enough screens to accommodate a 3-D-only release, but I'm not sure that's practical," he said.
Premium moviegoing experiences are the wave of the future, he predicted.
"By example, look to Imax as a place today where movies are doing very, very well, and people are paying a significant premium for them," he said.
He promised "Monsters vs. Aliens" will be a 3-D movie "unlike anything ever seen before" because it will be the first CG-animated film authored in 3-D as opposed to being postproduced in 3-D.
"The difference between those two experiences literally is black to white," he said.
During a conference call with analysts, Katzenberg couldn't contain his enthusiasm for DWA's relationship with McDonald's. DWA's marketing partnership with McDonald's began with "Shrek the Third" and continues through "Bee Movie," "Kung Fu Panda" and "Madagascar: The Crate Escape."
DWA struck its deal with McDonald's when the Walt Disney Co. decided to end its exclusive arrangement with the fast-food chain.
McDonald's support of "Shrek the Third" has been "exceptional," Katzenberg said. "Their execution is nothing short of breathtaking."
Also contributing to second-quarter revenue was "Over the Hedge" ($26.9 million), "Wallace & Gromit: The Curse of the Were-Rabbit" ($14.7 million), "Madagascar" ($12.7 million), "Flushed Away" ($12.4 million) and "Shark Tale" ($10.7 million).