Pair spin DVD different way
Unlike other studios, DreamWorks Ani, Marvel say disc sales are strongEven a recession hasn't deterred shoppers from snapping up DVD copies of "Kung Fu Panda" and "Iron Man."
DreamWorks Animation and Marvel reported fourth-quarter financial results Tuesday, and executives at both had the same message: DVD sales are strong at their companies, even as other studios are complaining of weakness.
"Despite the negative comments we have heard regarding retail sales performance within the DVD market, we are very pleased to report that both 'The Incredible Hulk' and 'Iron Man' DVDs have been performing at or above our expectations," Marvel CFO Kenneth West told analysts Tuesday.
DWA chief Jeffrey Katzenberg took it up a notch, boasting that even premium two-packs remain popular, though cheaper options are available to presumably cash-strapped consumers.
"Our customers, in an unexpected way, are trading up," Katzenberg told analysts.
And sales of "Madagascar: Escape 2 Africa" are "very, very strong out of the gate," COO Ann Daly added.
On the earnings front, DWA said profit fell 45% to $51.6 million on revenue that sank 31% to $199.8 million. The year-ago quarter was juiced by DVD sales of "Shrek the Third."
"That's a tough comparison," Katzenberg said in an interview.
Those results disappointed Wall Street, and the stock quickly retreated in after-hours trading despite Katzenberg's enthusiasm over DVD sales and his bullish outlook for "Monsters vs. Aliens," opening March 27.
At one point, he bemoaned an "undervalued" stock, suggesting that Wall Street hasn't rewarded the company for bucking a weak DVD market.
"CG-animated titles continue to perform at the top of the market," he told THR. "It's principally a parent purchase for a child, and they see high value in it."
As of the end of 2008, "Panda" had sold 11.2 million units. "Even as late as December, we projected just over 10 million," Katzenberg said. "Shrek the Third," as of year's end, was at 21.4 million sold.
Wall Street, though, was more enthusiastic about Marvel, which reported net income of $63 million on revenue of $224.3 million, both of which were more than twice the year-ago figures.
Marvel reported its results before the opening bell, and its shares soared 15% to $27.55 on Tuesday.
Marvel said the "Iron Man" DVD brought in $190 million in revenue last year, and "The Incredible Hulk" disc contributed $14 million.
Execs even reiterated their full-year guidance, saying that they are not experiencing the 10%-30% shortfall in DVD sales about which some other studios are complaining.
"Iron Man" and "Hulk" were the first two self-produced films for Marvel, and next year it will follow with "Thor" and a sequel to "Iron Man." (partialdiff)