Rising costs hurt Dreamworks Animation SKG Inc (NASDAQ:DWA) in the second quarter as profit dropped from a year earlier. Dreamworks Animation SKG, Inc. 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.
Dreamworks Animation SKG Inc Earnings Cheat Sheet for the Second Quarter
Results: Net income for the movie production company rose to $34 million (40 cents per share) vs. $24 million (27 cents per share) a year earlier. This is a rise of 42% from the year earlier quarter.
Revenue: Rose 38.1% to $218.3 million from the year earlier quarter.
Actual vs. Wall St. Expectations: DWA fell in line with the mean analyst estimate of 40 cents per share. It beat the average revenue estimate of $198.3 million.
Quoting Management: “Kung Fu Panda two is currently the fifth highest-grossing film of 2011 on a global basis and has exceeded $600 million at the worldwide box office to date,” said Jeffrey Katzenberg, Chief Executive Officer of DreamWorks Animation. “We are looking forward to the next two big events for the Company during the second half of the year: the November 4th theatrical release of Puss In Boots and the release of Kung Fu Panda two into the home video market in the fourth quarter.”
Gross margin shrank 2.3 percentage points to 35.3%. The contraction appeared to be driven by increased costs, which rose 43.1% from the year earlier quarter while revenue rose 38.1%.
The company has now fallen in line with estimates for the past two quarters. It reported net income of 10 cents in the first quarter.
Revenue rose last quarter after seeing a drop the quarter before. Revenue fell 33.4% to $108 million in the first quarter from the year earlier.
Competitors to Watch: Lions Gate Entertainment Corp. (NYSE:LGF), CKX Inc. (NASDAQ:CKXE), Seven Arts Pictures PLC (NASDAQ:SAPX), Point.360 (NASDAQ:PTSX), World Wrestling Entertainment, Inc. (NYSE:WWE), and Rentrak Corporation (NASDAQ:RENT). Lions Gate Entertainment (NYSE:LGF), Disney (NYSE:DIS), Sony (NYSE:SNE), Apple (NASDAQ:AAPL), Time Warner (NYSE:TWX), Comcast Corp (NASDAQ:CMCSA), Crown Media (NASDAQ:CRWN), IMAX (NASDAQ:IMAX), News Corp (NASDAQ:NWSA) and Netflix (NASDAQ:NFLX).
(Source: Xignite Financials)