DreamWorks Animation SKG Inc., maker of the “Shrek” movies, reported first-quarter profit fell 59 percent because of declining DVD sales and the lack of a fresh pay-television offering.
Net income fell to $8.79 million, or 10 cents a share, from $21.7 million, or 24 cents, a year earlier, the Glendale, California-based studio said today in a statement. Sales declined 33 percent to $108 million, missing the $109 million average of 12 analysts’ estimates compiled by Bloomberg.
The studio is releasing “How to Train Your Dragon” through pay-TV services this quarter, a few months later than expected, Michael Pachter, a Los Angeles-based analyst for Wedbush Securities Inc., said in an interview. The company also has been hurt by an industrywide decline in DVD sales, he said.
“The DVD market’s pretty much flooded,” Pachter said before the results were released. “The studios have trained consumers to wait” until prices fall or films become available through rental services.
The company plans two theatrical releases this year, “Kung Fu Panda 2” on May 26 and “Puss in Boots” on Nov. 4.
DreamWorks Animation fell 12 cents to $26.73 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have lost 9.3 percent this year.
(DreamWorks Animation plans a conference call at 4:30 p.m. New York time at +1-800-230-1074 for U.S. callers and +1-612-288-0340 for others.)