NEW YORK – DreamWorks Animation SKG Inc. said Tuesday its fourth-quarter profit fell as revenue sank 31 percent mainly because the home video release of “Kung Fu Panda” did not perform as well as last year’s “Shrek the Third.”
The Glendale, Calif.-based company said it earned $51.6 million, or 58 cents per share, in the latest period, down 45 percent from year-ago profit of $94.1 million, or 98 cents per share. The 2008 quarter included a tax benefit of 12 cents per share and an $8 million charge to more quickly write-down the costs of making “Kung Fu Panda” because of a slowing home video market.
Revenue fell to $199.8 million from $290.2 million in the year-earlier quarter.
The results missed expectations of analysts polled by Thomson Reuters, who expected a profit of 60 cents per share on $232.5 million in revenue, on average.
DreamWorks Animation, which releases two films a year, put out the latest “Madagascar” film and “Kung Fu Panda” in 2008. The company said “Kung Fu Panda” added $101.8 million to its fourth-quarter revenue, mostly in DVD sales — compared with $179.4 million from “Shrek the Third” in the same quarter a year ago.
“Madagascar: Escape 2 Africa” contributed $24 million, mainly in the form of consumer products and revenue from DreamWorks Animation’s distributor, the company said. The company also said the 2006 release “Over the Hedge” added $23.2 million to fourth-quarter revenue, mostly from U.S. network and international free television.
For the full year, DreamWorks Animation earned $142.5 million, or $1.57 per share, down 35 percent from $218.4 million, or $2.17 per share, in 2007. Revenue declined 15 percent to $650.1 million from $767.2 million.
Box office revenue from “Kung Fu Panda” and “Madagascar: Escape 2 Africa” totaled $1.2 billion in 2008. “Kung Fu Panda” has reported more than $630 million in box office revenue, while the “Madagascar” film reported $180 million in domestic revenue and more than $400 million in international revenue thus far.
The company said that in 2008 it bought back 6.8 million shares for $185 million. It still has about $50 million available under its current repurchase plan.
DreamWorks Animation expects that the “Madagascar” film and the upcoming “Monsters vs. Aliens” — which is set to open in the U.S. on March 27 and is the company’s first 3-D movie — will be the main contributors to its 2009 results.
CEO Jeffrey Katzenberg said “Monsters” should be able to play in more than 2,000 3-D screens available at its release, “more than enough to allow our film to serve as a proof of concept and to propel the new format forward.”
He also expects theater tickets will receive as much as a $5 premium for the 3-D showings. All of DreamWorks Animation films are to be shown in 3-D going forward.
DreamWorks Animation shares fell $1.08, or 5.5 percent, to $18.68 in after-hours trading, after finishing regular trading up 85 cents, or 4.5 percent, at $19.76.
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Business Writer Ryan Nakashima in Los Angeles contributed to this report.
