DreamWorks Earnings Cheat Sheet: Betting Big on Kung Fu Panda 2

Dreamworks Animation SKG Inc (NASDAQ:DWA) saw profit fall amid falling revenue. 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.

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Dreamworks Animation SKG Inc Earnings Cheat Sheet for the First Quarter

Results: Net income for Dreamworks Animation SKG Inc fell to $8.8 million (10 cents/share) vs. $21.7 million (24 cents/share) a year earlier. A decline of 59.4% from the year earlier quarter.

Revenue: Fell 33.4% to $108 million YoY.

Actual vs. Wall St. Expectations: DWA fell short of the mean analyst estimate of 12 cents/share. Estimates ranged from a loss of 3 cents per share to a profit of 28 cents per share.

Quoting Management: “DreamWorks Animation’s first quarter of 2011 was driven primarily by our 2010 films, including Megamind, which had a solid performance following its February 25th release into the home entertainment market,” said Jeffrey Katzenberg, CEO of DreamWorks Animation. “We now look forward to kick-starting the summer movie-going season with Kung Fu Panda two on May 26th, as family entertainment — and CG animation in particular — has performed at the top of the box office charts so far this year.”

Key Stats: Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell 1.2 percentage points to 33.3% from the year earlier quarter. Over that time, margins have contracted on average 5.3 percentage points per quarter on a year-over-year basis.

A year-over-year revenue decrease last quarter snaps a streak of three consecutive quarters of revenue increases. Revenue rose 41.9% in the fourth quarter of the last fiscal year, 39.4%in the third quarter of the last fiscal year and 19.8% in the second quarter of the last fiscal year.

Last quarter’s profit decrease breaks a streak of two consecutive quarters of year-over-year profit increases. Net income rose 95.7% in the fourth quarter of the last fiscal year and more than twofold in the third quarter of the last fiscal year.

Companies to Watch: Lions Gate Entertainment (NYSE:LGF), Viacom (VIA.B), 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) Image Entertainment (DISK) and Netflix (NASDAQ:NFLX).

Today’s Performance: Shares of DWA are unchanged in after hours trading.


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