DreamWorks Animation Q3 Profit Drops29 Oct, 2013 By: Chris Tribbey
DreamWorks Animation reported third-quarter revenue of $154.5 million and a profit of $10.1 million, both down from the same quarter in 2012. For the third quarter 2012 (ended Sept. 30) the studio reported revenue of $186.3 million and a profit of $24.4 million.
“Strength in our feature film segment is the single largest driver of our positive third quarter earnings,” said Jeffrey Katzenberg, CEO of DreamWorks Animation. “It also continues to propel new areas of growth for DreamWorks Animation as we have now transitioned into a global, diversified family entertainment company.”
Operating income for the quarter was just under $18 million, down from $38.7 million during the same quarter in 2012.
Rise of the Guardians contributed revenue of $42.4 million to the quarter, mostly from worldwide pay-TV, and has reached an estimated 4.3 million home entertainment units sold worldwide. Madagascar 3: Europe's Most Wanted and Puss in Boots contributed revenues of $10.9 million and $4.8 million, respectively, with Madagascar 3 hitting an estimated 8.1 million home entertainment units and Puss in Boots reaching an estimated 7.5 million home entertainment units sold worldwide.
Library titles contributed revenue of $52.2 million to the quarter, while TV series and specials contributed revenue of $18.2 million, mostly from Classic Media content and DreamWorks Dragons: Riders of Berk on the Cartoon Network.
DreamWorks Animation’s Turbo, released in theaters July 17, has grossed $246.2 million to date, and contributed revenue of $6.4 million to the third quarter, while The Croods, which was released in theaters March 22, has hit $587 million at the worldwide box office, and contributed revenue of $4.0 million to the quarter.
The home entertainment disc releases of both those films (The Croods on Oct. 1; Turbo on Nov. 12) fall in the fourth quarter.
Ann Daly, chief operating officer of DreamWorks Animation, pointed out that The Croods was the most successful original animated movie through the first 10 months of the year, and is currently the No. 6 grossing film at the worldwide box office for the year.
“The Croods is now on its way to becoming one of the best-selling titles of the year in the home video market,” she said. “It’s a category leader for big-box retailers [and] Fox has put its world-class distribution platform to work as we’ve gone to market with their team for the first time on a DreamWorks film. And we couldn’t be more pleased with the outstanding results we’re seeing so far.”
The film was the best-selling DVD and Blu-ray Disc during its first week of release.
The Croods was also released digitally two weeks before disc, generating more electronic sellthrough revenue for the title compared with other DreamWorks Animation properties during the same period of time.
Daly added that with the studio’s DVD segment, the studio has found continued success in releasing premium SKUs for major titles, either with value-added extras like toys, and by hitting a lower price point with some retailers.
Turbo, which is already available via digital ahead of the disc release, is being spun-off into an original series for Netflix in December, the first of several original series from DreamWorks Animation for Netflix.
“This marks an early milestone in our TV production strategy, which will ramp up significantly,” Daly said.
During the financial call, Katzenberg also addressed the state of the 3D industry, saying, “The audience, when they have some certainty they are going to get a premium experience, they are more than happy to pay for that premium.”