'Mr. Peabody & Sherman' push DreamWorks into loss
(Reuters) - DreamWorks Animation SKG Inc reported its first quarterly loss in five quarters as the Hollywood studio took an impairment charge related to the weak box office performance of the movie "Mr. Peabody & Sherman".
Shares of the Hollywood studio were down 1 percent in extended trading on Tuesday, after falling as much as 6 percent immediately after the results were released.
Three of DreamWorks' last four movies have had weak box office returns and the company has so far taken charges totaling about $157.5 million, more than its revenue in the quarter ended March 31.
The studio, which made the popular "Shrek" and "Kung Fu Panda" series, is aiming to make sequels as they require less advertisement costs and their international ticket sales often exceed those of their predecessors.
DreamWorks bad run at the box office started with the release of "Rise of the Guardians" in late 2012. That was followed by weak results for "Turbo" last year and continued with "Mr. Peabody & Sherman", a time-travel comedy about a talking genius dog and the boy he adopts, released in March.
While the box office results of "Mr. Peabody & Sherman" and "Turbo" were similar, the former had higher production costs and the latter was helped by a larger consumer products and licensing program, Chief Financial Officer Lew Coleman said on a conference call.
As of last weekend, "Mr. Peabody & Sherman" had grossed about $260.8 million worldwide, according to Box Office Mojo, a website that tracks theater ticket sales.
DreamWorks reported a net loss of $42.9 million, or 51 cents per share for the first quarter, due to a $57 million charge for "Mr. Peabody & Sherman". The studio earned $5.6 million, or 7 cents per share, a year earlier. [ID:nPn5sxrhr]
The movie contributed revenue of $3 million to total revenue of $147.2 million in the quarter. Analysts were expecting revenue of $137.2 million, according to Thomson Reuters I/B/E/S.
DreamWorks' hopes now rest on the June release of "How to Train Your Dragon 2" – a sequel that picks up five years after the protagonist "Hiccup" and his dragon "Toothless" united Vikings and dragons on Berk Island.
The studio's upcoming slate of movies include "Dragons" 2 and 3, "The Penguins of Madagascar", "Kung Fu Panda 3" as well as sequels to "Puss in Boots".
DreamWorks said it would release "The Croods" – a film that tracks a prehistoric family's road trip and the company's only successful movie in the past year – in international pay TV markets in the current quarter.
Shares of the company closed at $26.37 on the Nasdaq on Tuesday.