'The Croods' animate DreamWorks after 'Guardians' flop
(Reuters) - DreamWorks Animation SKG Inc reported better-than-expected quarterly results, helped by the worldwide success of its animated film, "The Croods", sending its shares up 9 percent in after-hours trading.
"The Croods," which tracks a prehistoric family on a road trip and features the voices of Nicholas Cage and Ryan Reynolds, raked in nearly $479 million worldwide, of which about 66 percent was from international markets.
"The strength of our worldwide box office results from 'The Croods' and over-performance in home video from both of our 2012 titles demonstrate success in DreamWorks Animation's core business so far this year," Chief Operating Officer Ann Daly said in a statement.
"The Croods" was released on March 22 and contributed $4 million in revenue for the January to March quarter. Most of Dreamworks' share of theater ticket sales will be recorded in the company's second quarter.
The success of "The Croods" follows the box-office debacle of the company's previous release, "Rise of the Guardians," that forced it to write down $165 million and report in February its first quarterly loss in almost six years.
Despite the writedown, "Guardians" home video sales beat expectations in the first quarter, as did "Madagascar 3: Europe's Most Wanted," Morningstar analyst Michael Corty said.
"The strong home video performance for 'Rise of the Guardians' is what stood out most," Corty said.
Hollywood studios have grappled with a declining home video market for years as DVDs fell out of favor and the industry encouraged digital sales. DreamWorks saw the pattern reversing when its home entertainment sales increased at the end of 2012 and the upward trend continued in early 2013, CEO Jeffrey Katzenberg said.
"All arrows were starting to head north," Katzenberg said in an interview. "Then the specific performance of 'Guardians' outperformed even that."
Digital sales lifted the total, COO Daly said on a conference call with analysts. DreamWorks made digital versions available a couple weeks before physical discs, she said.
DreamWorks' next animated feature film, "Turbo", scheduled to release on July 17, tracks the story of a garden snail who dreams of becoming the fastest snail in the world.
The company said it hopes to benefit from "Turbo", which features the voices of Ryan Reynolds, Snoop Dogg and Samuel Jackson, in the third quarter.
The movie, however, will face stiff competition from "Monsters University", "Epic", "Despicable Me 2" and "The Smurfs 2", all of which will release between May and July.
DreamWorks' net income fell to $5.6 million, or 7 cents per share, for the first quarter, from $9.1 million, or 11 cents per share, a year earlier.
Revenue fell marginally to $134.6 million.
Analysts expected a loss of 3 cents per share on revenue of $99.1 million, according to Thomson Reuters I/B/E/S.
DreamWorks shares rose 9 percent to $20.98 in after-market trading on Tuesday. The stock has risen about 9 percent in the last three months.