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DreamWorks Animation Profit Doubles on Tax Credit, ‘Dragon’

DreamWorks Animation CEO Jeffrey Katzenberg
Jeffrey Katzenberg, chief executive officer of DreamWorks Animation SKG Inc. Photographer: Daniel Acker/Bloomberg

Feb. 24 (Bloomberg) -- DreamWorks Animation SKG Inc., maker of the “Shrek” movies, said fourth-quarter profit doubled on a tax benefit and DVD sales of “How to Train Your Dragon.”

Net income increased to $85.2 million, or 99 cents a share, from $43.6 million, or 50 cents, a year earlier, the Glendale, California-based studio said today in a statement. Sales gained 42 percent to $275.7 million, missing the $291.7 million average of 11 analysts’ estimates compiled by Bloomberg.

Home-video sales partly countered weak box-office sales for “Megamind,” one of the studio’s three 2010 releases. The film collected as much as $90 million less than expected in U.S. and Canadian theaters, Doug Creutz, a Cowen & Co. analyst, said in a Feb. 22 note to investors. Animated films generally underperformed during the year, Creutz said. “Megamind” took in $320 million worldwide, DreamWorks Animation said.

Excluding some items, analysts expected profit of 73 cents a share, the average of 12 estimates. The tax credit added $45 million, or 52 cents, to earnings, DreamWorks Animation said.

“Megamind,” which comes out on DVD on tomorrow, won’t provide any meaningful contribution to the current quarter, the said in the statement.

DreamWorks Animation shares rose 7 cents to $28.10 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have fallen 4.6 percent this year.

During the year, DreamWorks Animation repurchased 3.1 million of its shares for about $111 million, according to the statement. The company has $150 million remaining under its current authorization.

(DreamWorks Animation plans a conference call at 4:30 p.m. New York time at +1-800-230-1059 for U.S. callers and +1-612-234-9959 for others.)

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

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net.

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