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DreamWorks Animation Reports Best Year Ever

26 Feb, 2008 By: Chris Tribbey

DreamWorks Animation SKG reported its best year ever in a fourth-quarter and year-end earnings call with investors Feb. 26. However, CEO Jeffrey Katzenberg delivered a note of caution.

“As we anticipated, the home video market was extremely competitive this past quarter, as an unprecedented number of summer blockbusters were all released into a very crowded market,” he said. “It is clear that the clutter, as well as competition at retail from other sources such as video games, has had an impact on the overall home video market.”

Shrek the Third shipped 15.6 million DVD units worldwide, DreamWorks president and CFO Lew Coleman said, and the movie was the fourth-best performing animated movie of all time, taking in more than $800 million at the worldwide box office. The franchise overall has earned more than $2.1 billion in theaters worldwide.

But if DreamWorks' next slate of titles is to do as well, they need to stand out, Katzenberg said.

“I believe good content can arise above the clutter,” he said, noting that consumers have more options than ever with video on demand and Internet downloading. “It is our job as filmmakers to continue to create compelling content that will be in high demand as these new platforms gain popularity.”

DreamWorks capped off a successful year with fourth-quarter (ended Dec. 31) total revenue of $290 million, and net income of $94 million. Mostly thanks to DVD sales of the third “Shrek” film, the ogre and friends contributed $179 million of that. For the year, the studio earned net income of $218 million, and generated revenue of $767 million.

DVD and international TV sales of the 2006 film Over the Hedge contributed $13 million for the quarter (with 15 million DVD units shipped worldwide for the year), while Flushed Away had shipped 6.5 million DVD units through the end of the year and contributed $8 million for the fourth quarter.

Looking toward the first quarter of 2008, and the year as a whole, DreamWorks is banking on the home video promises that 2007's Bee Movie holds ($285 million at the worldwide box office), and the theatrical, and eventual home video, success of the June release of Kung Fu Panda.

“Our full-year 2008 performance will be largely dependent on the success of Kung Fu Panda,” Coleman said.

DreamWorks also announced changes to its 2009 and 2010 theatrical plans. The 3-D film Monsters vs. Aliens will be released as scheduled in March 2009. However, How to Train Your Dragon will be moved to March 2010 and will be followed by the fourth “Shrek” movie, Shrek Goes Fourth, in May 2010. DreamWorks 2010 slate wraps up with MasterMind in November.

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