DreamWorks slips to loss as "Guardians" movie disappoints
(Reuters) - Movie studio DreamWorks Animation SKG Inc reported its first quarterly loss in almost six years as it wrote down $165 million related to the weak box office performance of "Rise of the Guardians" and its decision to delay another film.
The company also said it plans to cut jobs as it seeks to "meaningfully" reduce costs. It did not disclose the size of the job cuts but said they would be at the production, support and overhead departments.
DreamWorks shares, which have fallen about 7 percent in the last three months, were down 3 percent in after-market trading on Tuesday. They closed at $16.61 on the Nasdaq.
The animation studio behind the hugely successful "Shrek" and "Kung Fu Panda" franchises had hoped its fourth quarter would be driven by strong performance of the "Rise of the Guardians" from Thanksgiving to the Christmas holidays.
But "Skyfall," starring Daniel Craig in the 23rd installment of the James Bond franchise, and teen vampire film "The Twilight Saga: Breaking Dawn - Part 2," both of which released in November, trumped "Rise of the Guardians" at the box office.
DreamWorks said it wrote down about $87 million in costs related to the "Guardians" movie, an animated adventure fantasy featuring the voices of Alec Baldwin, Hugh Jackman and Jude Law.
"They have a history of making successful films and they've had one flop ... This movie was a bust, but based on their track record, I expect things to get better," Morningstar analyst Michael Corty said.
Based on William Joyce's "The Guardians of Childhood" book series, the film tracks the adventures of a carefree boy.
The film, which released in November, grossed $302.3 million at the worldwide box office. It contributed only 2 percent to DreamWorks' total revenue in the fourth quarter.
"While Rise of the Guardians did not achieve the level of box office success that we have come to expect from a DreamWorks Animation film, we have made several changes to our future slate ... ," Chief Executive Jeffrey Katzenberg said in a statement.
The "Guardians" film was the last distributed by Paramount for DreamWorks. The studio's films will now be distributed by News Corp's Fox studio.
"ME & MY SHADOW" SHELVED
The company said on Tuesday it took a $54 million charge as it stopped production work on "Me & My Shadow," an animated 3D fantasy film about a shadow taking control of its owner. (link.reuters.com/zym36t)
DreamWorks did not provide any future schedule for the film.
It also shifted the release date of "Mr.Peabody and Sherman" to March 2014 from November this year. DreamWorks said Fox advised the delay as it had huge success with its Ice Age franchise in the month of March.
DreamWorks' next film "The Croods" is slated to release on March 22. The comedy adventure tracks a prehistoric family on a road trip and features voices of Nicholas Cage and Ryan Reynolds among others.
The company said its full-year 2013 results are expected to be driven primarily by the performance of "The Croods", and "Turbo", which is scheduled to release on July 19.
"The majority of these films' profit will not occur until the second half of the year, specifically in the fourth quarter," Chief Financial Officer Lew Coleman said on a conference call with analysts.
The continued success of "Madagascar 3: Europe's Most Wanted", primarily from home entertainment and international box office, contributed about 36 percent to fourth-quarter revenue.
The net loss was $82.7 million, or 98 cents per share, in the fourth quarter, compared with a profit of $24.3 million, or 29 cents per share, a year earlier.
Revenue at the company, which competes with Walt Disney Co's Pixar among others, rose 21 percent to $264.7 million.
Analysts had expected revenue of $216 million, according to Thomson Reuters I/B/E/S.
(Reporting by Chandni Doulatramani in Bangalore; Editing by Saumyadeb Chakrabarty)
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