'Dragon' a Drag for DreamWorksWednesday, July 30, 2014
Weak box office results for “How to Train Your Dragon 2” put a drag on DreamWorks Animation SKG Inc. second quarter earnings, which failed to match analysts’ expectations.
The Glendale animation studio reported on Tuesday a net loss of $15.4 million (-18 cents a share), compared with net income of $22.3 million (26 cents) in the same period a year earlier. Revenue fell 42 percent to $122 million.
Analysts on average expected a net loss of 2 cents on revenue of $138 million, according to Thomson Financial Network.
“Dragon 2” was released with two weeks remaining in the quarter and has brought in more than $400 million in domestic and international box office receipts. Still, the film has yet failed to make money for DreamWorks Animation’s primary distributor, 20th Century Fox.
DreamWorks Chief Executive Jeffrey Katzenberg was upbeat prior to the release of “Dragon 2” that it would put the company back on track financially and remained so after the earnings announcement.
“(It’s) the ninth highest-grossing film of the year so far on a worldwide basis and it has yet to be released in several significant international territories,” Katzenberg said in a prepared statement. “It will be a highly profitable film for the company and will remain a very valuable franchise for many years to come.”
This was the second quarter in a row that DreamWorks released poor earnings. In the first quarter, the studio had a net loss of $43 million and took a $57 million write-down on its spring release, “Mr. Peabody and Sherman.”
Also, the company disclosed without comment during its earnings' call that the Securities & Exchange Commission was investigating a prior write-down of $13.5 million taken in the fourth quarter of 2013 on last summer’s feature film, “Turbo.” The film brought in $282 million in global box office.
Shares closed down 28 cents, or about 1.2 percent, to $22.66 on the Nasdaq.