'Shrek 3' lifts DreamWorks Ani
Empty"Shrek the Third" is now the third-highest-grossing animated film of all time worldwide, an achievement that dramatically propelled quarterly financial results for DreamWorks Animation, though Wall Street was initially unimpressed.
DWA said Tuesday that it earned $47 million in the third quarter, up nearly 350% from the $10.5 million it earned a year ago. On a per-share basis and excluding 4 cents for a tax break, the company earned 44 cents, one cent shy of Wall Street expectations. Revenue rose 189% to $160.8 million, short of the $165.6 million expected by analysts.
The penny miss on per-share profit and nearly $5 million miss on revenue caused investors to sell shares in after-hours trading, where the stock shed as much as 8% after having gained 1.3% during regular trading to $32.53.
"Shrek the Third" contributed $92.1 million in revenue during the quarter, primarily from international box-office receipts. The movie has reached about $793 million worldwide, better than all other animated feature films except "Shrek 2" and Disney-Pixar's "Finding Nemo."
CEO Jeffrey Katzenberg also made it official during a conference call with analysts Tuesday that the story acquired in April titled "Master Mind" will join the next "Shrek" movie — which Katzenberg called "Shrek Goes Fourth" — to complete DWA's 2010 feature slate.
"Master Mind," the movie's working title, was brought to DWA by Red Hour Films, the production company of Ben Stiller and Stuart Cornfeld and revolves around a super villain who accidentally kills his archrival.
Before "Shrek Goes Fourth" the green ogre will be seen in an ABC Christmas special titled "Shrek the Halls" and he is due in a Broadway musical next year.
Katzenberg had nothing but praise for Jerry Seinfeld, whose "Bee Movie" for DWA opens Friday in about 3,900 theaters, telling analysts that the comedian might be doing more marketing for a film than "anyone's ever done before."
He reiterated that his decision to open "Monsters vs. Aliens" in March 2009 rather than in the summer makes sense because the movie can then be on nearly 100% of the 3-D screens in the country for at least six weeks.
As has been Katzenberg's style since the company said in 2005 that sales of "Shrek 2" DVDs weren't meeting lofty projections, the CEO went out of his way to be cautious about expectations for "Shrek the Third." The DVD is scheduled for release Nov. 13.
While predicting it will be "among the top performers" of DVDs this year, he warned of competition coming from an "unprecedented number of high-quality" DVDs scheduled to hit store shelves in then next two months.
Some of that competition includes "Spider-Man 3" and "Transformers," both of which are already out, as well as the upcoming "Ratatouille," "Pirates of the Caribbean: At World's End," "The Simpsons Movie," "Harry Potter and the Order of the Phoenix" and the extended version of "High School Musical 2."
DWA ended the quarter with $544 million in cash and equivalents. It recently purchased 770,000 shares of stock for $31.79 apiece from Steven Spielberg charitable organizations, president and acting CFO Lew Coleman said.
Beyond "Shrek," the largest revenue contributors in the third quarter were "Over the Hedge" ($17.8 million), "Flushed Away" ($17.3 million) "Madagascar" ($5.8 million) and "Wallace and Gromit: Curse of the Were-Rabbit" ($3.9 million). The remainder of the library, primarily driven by "Shrek 2" and "Shark Tale," brought in $23.9 million in revenue during the quarter.