Oct. 27 (Bloomberg) -- DreamWorks Animation SKG Inc., the maker of “Shrek” movies, said third-quarter profit declined 48 percent after its “Monsters vs. Aliens” DVD was released too late to lift sales.

Net income fell to $19.6 million, or 23 cents a share, from $37.4 million, or 41 cents, a year ago, the Glendale, California-based company said today in a statement. Excluding a gain, profit of 20 cents topped the 19-cent average of 17 analysts’ estimates compiled by Bloomberg. Sales slid 11 percent to $135.4 million. Analysts projected $127.9 million on average.

DreamWorks Animation is increasing production to three movies next year. The DVD for 3-D, computer-generated “Monsters vs. Aliens,” this year’s only film, didn’t reach stores until Sept. 29, one day before the quarter ended. As a result, much of the revenue will be booked in the fourth quarter.

“We expect the title to sell well into the holiday period,” Chief Executive Officer Jeffrey Katzenberg said on a conference call.

DreamWorks Animation rose 40 cents to $32.38 in extended trading after the release. The shares fell 15 cents to $31.98 at 4 p.m. New York time on the Nasdaq Stock Market and have gained 27 percent this year.

The company sold 4.6 million copies of “Monsters vs. Aliens” in the quarter, Katzenberg said. He declined to forecast fourth-quarter sales in an interview.

Last year, the DVD for “Kung Fu Panda” was released earlier, allowing for more sales, Michael Pachter, a Los Angeles-based analyst with Wedbush Morgan Securities, wrote on Oct. 8.

No Sequel

The company doesn’t plan a “Monsters” sequel, Katzenberg said. The movie generated less in ticket sales than other DreamWorks Animation releases such as “Shrek the Third,” which took in $799 million globally, according to Sherman Oaks, California-based researcher Box Office Mojo.

“Monsters vs. Aliens” took in $380 million worldwide, including $181.5 million outside the U.S. and Canada. Marketing a sequel in international markets where the original struggled would be difficult, Katzenberg said.

“In certain parts of the world it would be like pushing a boulder up a hill,” he said, without identifying the markets.

DreamWorks Animation isn’t under pressure to sell itself to a larger studio, Katzenberg said.

“As a standalone albeit small indie, we can enjoy enormous growth opportunities,” he said.

DreamWorks is making all of its movies in 3-D. About 3,300 to 3,500 screens in the format are available in the U.S. and Canada and about 3,300 in other countries, Katzenberg said.

Next year’s movies include a new “Shrek” film and “How to Train Your Dragon,” based on the children’s book by Cressida Cowell, and “Oobermind,” a super-hero feature, according to the Internet Movie Database.

(DreamWorks Animation plans a conference call at 4:30 p.m. New York time. Call +1-800-230-1074 to listen.)

To contact the reporters on this story: Michael White in Los Angeles at mwhite8@bloomberg.net

Last Updated: October 27, 2009 19:22 EDT