DreamWorks Animation Stock Jumps After Q3 Revenue Gains

By Patrick Hipes, Anita Busch

UPDATE with earnings call: DreamWorks Animation unveiled third-quarter earnings today that showed a 43% revenue increase compared with a year ago thanks to stronger TV and home entertainment results especially with its previous theatrical release Home. The news sent DWA shares soaring as high as 13.8% in post-market trading.

Due to its restructuring plan unveiled in January, DWA reported a net loss in the quarter of $3.5M, or 4 cents a share. Operating income was $26.8M.

DWA said Q3 revenue was $259.2M, with the feature film segment revenue up 11% year-over-year though it had no theatrical releases in the quarter (up next for them: Kung Fu Panda 3 via Fox in January both in the U.S. and China). Analysts had expected revenue of $205.98M.

On the post-earnings call, CEO Jeffery Katzenberg was looking ahead to two 2016 releases, especially Trolls, which he said would be the “biggest, deepest, longest” marketing and consumer product campaign ever for a DWA film; as a new property there is increased interest and better opportunity for merchandising and licensing opportunities. That pic opens worldwide November 4.

In the leading home entertainment division during the third quarter, How To Train Your Dragon 2 sold 8.9M home entertainment units worldwide through the quarter that ended September 30. Home, released in theaters in March, sold 4.7M units and contributed revenue of $49.7M for Q3; Home has grossed $386M globally and was just shortlisted in the Feature Animation Oscar race.

Penguins Of Madagascar sold 3.6M units and has contributed $39.8 in the just-ended quarter primarily from international and domestic pay TV. Mr Peabody & Sherman contributed $2.6M after selling 4.2M units.

The TV business tripled revenue in the quarter compared with a year ago to $50.7M — it was $14.3M in Q3 2014 — as episodes of DWA show grew with new content licensing agreements. Those include Verizon’s Go90 product to which DWA has committed about 175 hours in a multiyear agreement, CFO Fazal Merchant said on the call.

Merchant said DWA was on track to meet its year-end guidance in the TV unit with a projected $250M, mostly related to its deals with Netflix. The company was fairly bullish on guidance overall, expecting single-digit increases in film next year consumer products tracking slightly higher in estimates for the full year.

This article was printed from https://deadline.com/2015/11/dreamworks-animation-third-quarter-earnings-restructure-1201609595/