DreamWorks’s Turbo Debut Draws Writedown Forecasts
While it once looked like the partnership between DreamWorks Animation SKG Inc (NASDAQ:DWA) and General Motors (NYSE:GM) could drive an animated snail and his Chevy Camaro to a box office boom, analyst predictions and discouraging sales reports have since squashed that dream.
Following a disappointing opening at the box office, DreamWorks’s new movie Turbo suffered turbulent forecasts from analysts — especially one who, according to Bloomberg, predicted a writedown of as much as $50 million for the film. James Marsh, a Piper Jaffray analyst in New York, initially estimated a $140 million total domestic take for Turbo, but now he thinks the film will be lucky to reach $100 million in U.S. and Canadian theaters. This pessimistic forecast led shares of the independent film studio to fall 4.5 percent to $23.77 Monday at the close in New York, after already sustaining a 6 percent fall earlier in July after other analysts lowered their expectations for the film’s debut.
Turbo‘s sales only totaled $21.5 million this past weekend; however, positive reviews and high movie ratings from audiences could bolster future success, as well as pave the way for better figures for the movie’s debut in Europe, Korea, and China. The film won an “A” rating from CinemaScore, and the spread of positive reviews is also easier now thanks to the various streams of social media. In addition, a crowded summer theater weekend could also be to blame for Turbo‘s less than stellar U.S. performance.
Marsh’s writedown still comes at a less than optimistic time for the Glendale, Calfornia-based film studio which has already had to sustain a similar major writedown for its last big release, Rise of the Guardians in November 2012. The film suffered a $87 million writedown after a similarly disappointing $23.8 million opening; however, this summer, DreamWorks Animation’s partnership with 21st Century Fox Inc. (NASDAQ:FOXA) could help save Turbo from the same trouble.
After ending its pact with Viacom Inc. (NYSE:VIA), DreamWorks signed with Fox in August to allow the studio to “keep rights with domestic television revenue and [provide] lower digital distribution costs.” This partnership could then help the animated snail’s film avoid another writedown on the scale of Guardians, but still, only time will tell.
Since its opening on July 17, Turbo has offically generated an estimated $31.2 million at domestic theaters, while analysts initially estimated the film to hit $40 million by this point.