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DreamWorks third-quarter profit beats Street
By Donna Smith and John Whitesides
LOS ANGELES (Reuters) - DreamWorks Animation SKG Inc posted better-than-expected net quarterly profit on Tuesday, helped by the release of the "Monsters vs. Aliens" DVD, sending its shares up 3.2 percent after hours.
DreamWorks posted net income of $19.6 million, or 23 cents per share, and revenue of $135.4 million, compared with net income of $37.4 million, or 41 cents a share, and revenue of $151.5 million a year ago, when results were boosted by the animated hit "Kung Fu Panda."
DreamWorks results exceeded analysts' average estimates for earnings of 16 cents a share, according to Thomson Reuters
I/B/E/S.
Shares of DreamWorks rose to $32.99 in after-hours trade, after closing down 15 cents or 0.47 percent at $31.98 a share.
"Monsters vs. Aliens" contributed $33.4 million of revenue to the quarter, driven by a strong performance at the worldwide box office and its initial release into the domestic home entertainment market on September 29.
DreamWorks now expects its fourth quarter to be driven primarily by two TV specials: "Monsters vs. Aliens: Mutant Pumpkins from Outer Space" and "Merry Madagascar", both of which are scheduled to air in prime-time on NBC. "Merry Madagascar" is also scheduled to be released into the home entertainment market in the fourth quarter.
Chris White, an analyst with Wedbush Morgan Securities, expects DVD industry sales to rebound in 2010 and for DreamWorks to be a prime beneficiary.
He said that while confusion about the new Blu-ray format and the weak economy have held up Blu-ray player and disc sales, he expects lower player pricing to spark a bounce in sales next year.
DreamWorks' latest quarterly results included a tax benefit of $2.5 million related to a tax sharing agreement with a former stockholder. The benefit was partially offset by a $2.1 million increase in costs.
The net benefit of $0.4 million, when combined with the company's research and development tax credit related to the prior year of about $1.8 million, resulted in an overall net increase to net income of $2.2 million, or an estimated 3 cents per share on a fully diluted basis.
(Reporting by Susan Zeidler)
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