DreamWorks Animation SKG Inc. said second-quarter earnings will shrink from a year ago because of the domestic box-office performance of “Shrek Forever After” and weaker home-video sales. The shares fell 4.1 percent.
The Glendale, California-based company probably will report earnings per share that are “meaningfully below” a year earlier, Lewis Coleman, president and chief financial officer, said today at a William Blair & Co. conference in Chicago.
DreamWorks Animation posted net income of 30 cents a share in the year-earlier period. Analysts forecast 34 cents for the quarter that ends this month, the average of 17 estimates compiled by Bloomberg. They project sales of $156.6 million.
The shares have slid 22 percent since the release of the fourth “Shrek” movie on May 21. The film, the final in the series, opened with $70 million in U.S. box office sales, below investors’ expectations, Coleman said. “Shrek” will be a profitable film, contributing the majority of its revenue in the second half of the year, he said.
“The company’s recent stock price performance is an indication that investors had higher expectations,” Coleman said. Earnings also have been affected by the lack of a home-video release this year, he said.
DreamWorks Animation, also the maker of the “Madagascar” films, fell $1.16 to $27.08 at 4 p.m. New York time in Nasdaq Stock Market trading.
Lazard Capital Markets Ltd. estimates that DreamWorks Animation will report earnings of 17 cents a share in the second quarter, Barton Crockett, an analyst at the New York-based firm, said in an interview.
“Shrek” will finish with about $250 million in U.S. box-office sales, Crockett said. The film garnered $213.9 million in ticket sales as of June 15, according to researcher Box Office Mojo LLC.
“They’re still having a good year,” Crockett said. “We just thought they’d have a spectacular year.”