DreamWorks Animation Profit Drops in Q328 Oct, 2008 By: Chris Tribbey
DreamWorks Animation SKG announced a drop in third-quarter profits of more than 21% compared to the same period last year, as the company announced that co-founder David Geffen will leave the company’s board of directors.
The company reported total revenue of $151.5 million for the three-month period ending Sept. 30 and net income of $37.4 million, compared to $160.8 million and $47 million during the same period in 2007.
President and CFO Lew Coleman said Kung Fu Panda contributed more than $63 million for the quarter. DVD sales of Shrek the Third have hit more than 20 million total units shipped by the end of the quarter, he added, while Bee Movie has shipped 7.5 million.
CEO Jeffrey Katzenberg added that the DVD and Blu-ray Disc releases of Kung Fu Panda on Nov. 9 and Shrek the Hall’s DVD release Nov. 4 will help push the company’s fourth-quarter numbers.
“Accompanying Kung Fu Panda on DVD and Blu-ray will be a brand new, 22-minute companion story … what we believe is among the most extensive bonus content ever created for a home video release,” Katzenberg said in a conference call with investors. “… We anticipate that consumers will recognize this as an exceptional added value.”
“Shrek the Halls … mark[s] our foray into the non-theatrical special content business,” he said. “Over 21 million viewers tuned in for the television premiere of Shrek the Halls, making it one of the most watched shows of 2007.”
Katzenberg praised Geffen, who helped found the company.
“David’s vision for and commitment to the company has been absolutely vital throughout its 14-year history,” he said. “Without him, there would be no DreamWorks Animation.”
Katzenberg also noted that DVD sales have been resilient this year during the economic downturn, saying, “I think [they] have held up very well and we have seen good performance by the big titles. … So far, the DVD market has performed well. In terms of Kung Fu Panda, we think it’s well-placed, got a great date, it’s a strong property, [and it] seems to have a very good appeal in terms of our market research and we are cautiously optimistic.”
For Blu-ray, Katzenberg said it’s “growing” for the company, but he did not expect Blu-ray sales to be significant for Kung Fu Panda compared to DVD. And in regards to DreamWorks’ split from Paramount, moving to Universal for distribution instead, Katzenberg said the decision would have no affect on DreamWorks Animation SKG, which is separate from the deal.
“Paramount’s relationship for DreamWorks Animation remains very strong,” he said. “They have done an outstanding job in servicing the distribution of our product, as I think seen by the results. … We do not anticipate any change in the relationship with Paramount.”