DWA financials exceed expectations
Second-quarter gains bounced by 'Panda'Inspired by a fat and lazy cartoon bear, DreamWorks Animation exceeded second-quarter financial expectations and predicted that its hit film "Kung Fu Panda" will kick in even more money in the months to come.
But as huge as "Panda" is, CEO Jeffrey Katzenberg said there are still no firm plans for a sequel, blaming a delay on "the snowballing of the success of the film."
"We're not ready to say yes, but there's lots of enthusiasm" for a sequel, he told analysts Tuesday. He also called it "premature to push the button on it."
President and CFO Lew Coleman said that if there is a "Panda" sequel, it would be a 2011 release.
DWA earned $27.5 million in the quarter, down from $61.8 million a year ago when the biggest profits from "Shrek the Third" were rolling in. On a per-share-basis and excluding some items, DWA earned 28 cents, about a nickel better than Wall Street expected.
Revenue fell from $222.5 million in the year-ago quarter to $140.8 million this time around, with "Panda" contributing $46.4 million.
The second-biggest contributor in the quarter was "Shrek the Third," which brought in $29.9 million, mostly via domestic pay TV. The title has shipped 20.3 million DVD units worldwide as of the quarter's end.
The financially disappointing "Bee Movie" was responsible for $25.5 million during the quarter. That film has shipped 7.1 million DVDs worldwide so far.
"Flushed Away" and "Over the Hedge" brought in $7.3 million and $5.4 million, respectively, and DWA library titles contributed $21 million.
Katzenberg boasted that "Panda" is DWA's most successful non-sequel since the company went public in 2004, and with international boxoffice receipts coming in it will be the primary driver of third-quarter earnings. He said "Panda" is already the most successful animated film of all time in China.
The movie is expected to be the primary contributor to the fourth quarter as well, courtesy of the "Panda" DVD release set for November.
Also in November, DWA has "Madagascar: Escape 2 Africa" hitting theaters. And a $25 million "Shrek the Musical" stage play opens next month in Seattle before heading to Broadway in December.
Katzenberg also announced that executive chairman Roger Enrico will become non-executive chairman and that Coleman has extended his contract through 2011.
DWA also said it has authorized a $150 million repurchase of stock after having already bought $88 million worth at an average price of $24 per share. DWA shares closed Tuesday at $31.29.
And the company said it plans to spend $85 million during the next two years to expand its animation studio in Glendale, including beefing up its 3D capabilities.
Katzenberg said he expects as many as 3,000 3D screens for the March 2009 release of "Monsters vs. Aliens," and he's hoping moviegoers will pay a $5 premium per ticket. Asked who sets the price for a 3D movie ticket, he said, "It's complicated."
Katzenberg noted the usual per-ticket upcharge for 3D is about $3 but that Disney's "Hannah Montana/Miley Cyrus: Best of Both Worlds Concert Tour" commanded $8 more per ticket.