DreamWorks Animation Reports $43.6 Million Q4 Profit23 Feb, 2010 By: Chris Tribbey
Strong DVD/Blu-ray sales and successful TV initiatives pushed DreamWorks Animation SKG to a profitable fourth-quarter 2009 (ended Dec. 31), with the studio reporting a profit of $43.6 million on revenue of $194.2 million.
For all of 2009, DreamWorks Animation saw a profit of $151 million on revenue of $725.2 million, compared to a profit of $142.5 million on revenue of $650.1 million in 2008.
“While shifting consumer habits are having a greater impact on the home video market than ever before; our titles remain at the top of the charts,” DreamWorks Animation CEO Jeffrey Katzenberg said during a Feb. 23 conference call with investors.
Last year’s Monsters vs. Aliens contributed $29.1 million to the quarterly results, with an estimated 6.6 million home entertainment units sold for the year. The 2008 films Madagascar: Escape 2 Africa and Kung Fu Panda contributed a combined $40.8 million. Through the end of the fourth quarter, those two titles had sold a combined 30.3 million home entertainment units sold. Shrek the Third, from 2007, contributed $38.6 million in revenue for the quarter, thanks to domestic and international TV.
Library titles helped contribute another $33 million.
With three 3D movies on tap for this year — How to Train Your Dragon, Shrek Forever After and Megamind — Katzenberg said “2010 could be the biggest year for the company.”
Katzenberg said the success of Avatar was “a clear indication of [3D’s] massive appeal,” and he expressed surprise at how many consumer electronics companies are debuting 3D TVs this year.
“We were really kind of amazed at the rate of adoption to 3D going on in the consumer electronics industry,” he said. “The quality of products they’re bringing to market is outstanding. We thought it would be a number of years before we saw revenue in terms of the home [3D] market.”
Regarding complaints from theater owners about studios shortening the windows between the big screen and DVD, both in North America and internationally, Katzenberg said his studio wasn’t changing its game plan any time soon.
“We’re currently happy with the windows we have for DreamWorks Animation product,” he said.
Ralph Schackart, analyst with William Blair & Co., said in a note to investors that the studio surpassed earnings expectations, though he noted that the 2 million home video unit sales for Monsters vs. Aliens during the fourth quarter was “relatively light.”
“DreamWorks is producing top 3D content and is leveraging it across new revenue streams, including consumer products, TV specials and series, and virtual worlds,” Schackart wrote. “It will release three 3D movies in 2010 that will comp well against its one movie release in 2009.
“Moreover, the 3D screen rollout continues to increase, and we believe management effectively answered concerns about 3D screen availability for How to Train Your Dragon, and DreamWorks Animation in 2010 should benefit from continued 3D expansion.”