* Q1 EPS 71 cents vs 28 cents
* Ex-tax benefit, EPS 68 cents vs 46 cents consensus
* Shares rise more than 15 pct after-hours
(Adds “Monsters vs. Aliens” TV series, details)
By Sue Zeidler
LOS ANGELES, April 28 (Reuters) - DreamWorks Animation SKG Inc DWA.O posted better-than-expected first-quarter net earnings on Tuesday as demand for its “Madagascar: Escape 2 Africa” DVD remained strong, despite industrywide DVD sale weakness, and its shares rose over 15 percent after-hours.
DreamWorks Animation, which also released its first 3-D film, “Monsters vs. Aliens” during the quarter, posted first quarter net income of $62.3 million, or 71 cents per share, compared with $26.1 million, or 28 cents per share, a year ago. Revenue rose to $263.5 million from $157.2 million.
Excluding items, the company had earnings of 68 cents versus consensus estimates of 46 cents a share, according to Reuters Estimates.
Dreamworks chief executive officer Jeffrey Katzenberg said on a conference call that, while the overall DVD sell-through industry remains challenged, his company’s DVD products, such as its “Madagascar: Escape 2 Africa” targeted at the kids’ market, were performing well.
The DVD contributed $147.5 million of revenue during the quarter, in line with analysts’ expectations.
“We’ve now been through, you know, one of the most difficult, challenging and turbulent times in the home video business over these last nine months,” Katzenberg said.
“But we have just simply not been impacted in the same way the rest of the industry has and we think that’s unique to our category and our product,” he added, noting that parents view purchasing DreamWorks titles as they would a toy.
“It is going to be seen you know, 100 times by kids, and it is very durable and portable.”
DreamWorks also restated Katzenberg’s contract on Tuesday, extending his term to 2014, keeping his base salary at $1.
DreamWorks said “Monsters vs. Aliens” grossed $175 million domestically and is on track to reach around $200 million domestic box office.
Internationally, the film has grossed about $145 million to date, below the company’s expectations due to disappointing showings in Germany, France and Italy.
On the call, Katzenberg said the premiums on 3-D ticket prices also did not reach levels initially anticipated, but he expects tickets will command those premiums on future 3-D feature releases, eventually reaching $5 premiums over ticket prices for standard 2-D films.
Analysts were pleased with the results and the DVD revenues in particular.
“I think it was a good report. The DVD business is keeping up better for them than people had feared,” said Barton Crockett, an analyst with Lazard Capital Markets.
Katzenberg also said that DreamWorks had begun developing a television series based on “Monsters vs. Aliens” after it received interest from a couple of companies.
He declined to disclose the names of the companies, but described them as companies “in the animated TV side of the business.”
The company is also well into production of a pilot for a series on “Kung Fu Panda,” he added. (Reporting by Susan Zeidler; Editing by Andre Grenon)