Dreamworks Animation SKG Inc. Earnings: Beats Estimates

Dreamworks Animation SKG Inc. (NASDAQ:DWA) reported net income above Wall Street’s expectations for the first quarter. Dreamworks Animation SKG is engaged in the development, production, and exploitation of animated films and characters in the worldwide theatrical, home entertainment, television, merchandising and licensing, and other markets.

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Dreamworks Animation SKG Earnings Cheat Sheet for the First Quarter

Results: Net income for Dreamworks Animation SKG Inc. rose to $9.1 million (11 cents per share) vs. $8.8 million (10 cents per share) in the same quarter a year earlier. This marks a rise of 3.2% from the year-earlier quarter.

Revenue: Rose 26% to $136.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Dreamworks Animation SKG Inc. beat the mean analyst estimate of 9 cents per share. Analysts were expecting revenue of $134.3 million.

Quoting Management: “DreamWorks Animation’s first quarter of 2012 was driven primarily by Puss In Boots’ continued success at the international box office and the solid performance from its home video release to date,” said Jeffrey Katzenberg, Chief Executive Officer of DreamWorks Animation. “We look forward to releasing the third chapter of our blockbuster Madagascar franchise in theaters on June 8th.”

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 4.2 percentage points to 29.1% from the year-earlier quarter. Over that time, margins have contracted on average 4.1 percentage points per quarter on a year-over-year basis.

Last quarter’s year-over-year revenue increase follows two quarters of revenue declines. Revenue fell 20.6% in the fourth quarter of the last fiscal year and fell 14.9% in the third quarter of the last fiscal year.

The profit increase last quarter ends a two-quarter streak of year-over-year profit decreases. In the fourth quarter of the last fiscal year, net income fell 71.5% while the figure dropped in the third quarter of the last fiscal year.

The company topped expectations last quarter after falling short of forecasts in the fourth quarter of the last fiscal year with net income of 29 cents versus a mean estimate of net income of 34 cents per share.

Looking Forward: Over the past ninety days, the average estimate for the second quarter has fallen from 26 cents per share to 20 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. The average estimate for the fiscal year is 94 cents per share, down from $1.13 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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