'Madagascar' floats DWA in Q2
'Madagascar' floats DWA in Q2DreamWorks Animation SKG said Thursday that it swung into positive bottom-line territory with its second-quarter earnings, based on strong home video and pay television performances from last summer's theatrical release "Madagascar."
The film studio boasted a profit of $13.7 million for the quarter ending June 30 compared with a loss of $3.7 million in the same period a year ago. Revenue for the Glendale-based company rose from $35.4 million a year ago to $74.9 million.
"Madagascar," which DWA CEO Jeffrey Katzenberg called "our most successful theatrical release to date for an original film," grossed $193.6 domestically when it bowed in May 2005. For the quarter, "Madagascar" contributed $37.9 million in revenue through home video and pay television. Since its home video release in the fourth quarter, the company had shipped 18.9 million units through the close of the second quarter.
Katzenberg said in an interview that he believes the home video market is stabilizing, which is having a positive impact on DWA's product. "Both 'Madagascar' and our catalog were strong in the quarter, which is reflective of that stabilization," he said.
DWA's most recent theatrical release, "Over the Hedge," which bowed in May and has earned $152.9 million at the boxoffice, has contributed $10.7 million in revenue in the quarter, as is typical for a film in the quarter of its release. Of the revenue, $4.6 million was associated with the annual cost reimbursement from Paramount Pictures, which distributed the film.
Other films contributing to the quarter include the 2004 theatrical release "Shark Tale," which is now generating revenue of about $9.6 million through its international pay television run. "Wallace and Gromit: The Curse of the Were-Rabbit," which bowed last year to underwhelming results, contributed $3.4 million in revenue, primarily from its home video sales for the quarter. To date, "Were-Rabbit" has reached an estimated 4.4 million units shipped through the second quarter.
Looking ahead, DWA reiterated that without a new release in either the theatrical or home video market for the third quarter, it is unlikely to have any significant drivers of revenue or profits.
"We're in this for the long haul and not about a quarter-to-quarter enterprise," Katzenberg said. "While we are still a baby company and have to continually get the message out, I believe our investor base is becoming more comfortable with the cyclical nature of our business."
Revenue for the remainder of the year is expected to be driven by "Hedge" in the ancillary markets. "Hedge" is scheduled for an Oct. 17 release on video.
DWA's next theatrical release will be "Flushed Away," set to bow domestically Nov. 3.