DreamWorks Animation SKG Inc. reported better-than-expected results, reflecting growth from its TV and online businesses as the maker of “Shrek” and “How to Train Your Dragon” restructures its struggling movie operation. The shares rose.
Profit, excluding some items, was 2 cents a share, Glendale, California-based DreamWorks Animation said Thursday in a statement. Analysts predicted a loss of 4 cents, the average of five estimates compiled by Bloomberg. Revenue grew 43 percent to $259.2 million, beating projections of $207 million.
DreamWorks Animation, led by Chief Executive Officer Jeffrey Katzenberg, has cut jobs and reduced production to one film this year amid growing competition in animation. The company’s only 2015 theatrical release, “Home,” came out in the first quarter and generated $386 million in worldwide sales, according to Box Office Mojo. The company’s TV business is making shows for Netflix Inc., including “Dragons: Race to the Edge” and “Dinotrux.”
“Our strong third-quarter results highlight the earnings potential of our company,” Katzenberg told analysts on the company’s earnings call, “when all of our businesses are delivering meaningful segment gross profit and reflect the progress I believe we’ve made” through the year.
DreamWorks Animation advanced 9.8 percent to $22.19 in extended trading. The shares advanced 0.4 percent to $20.21 at the close in New York, before the results. The stock has fallen 9.5 percent this year.
The performance of “Home” on home entertainment platforms helped drive the results of Dreamworks Animation’s film segment, becoming its biggest title in terms of digital purchases. The company raised its profit forecast, saying full-year 2015 adjusted operating income will exceed $30 million.
Eric Wold, an analyst at B. Riley & Co., described the results as “blowout numbers.” Wold, who has a buy rating on the stock, said “while still early in the restructuring process, we are increasingly confident in our upgrade in August, with management re-focused heading into 2016.”
Third-quarter revenue from DreamWorks Animation’s TV business more than tripled in the period to $51 million. A multi-series deal with Netflix could help the company achieve its full-year revenue goal of $200 million to $250 million from TV, said analysts from Bloomberg Intelligence.
Katzenberg said TV would continue to be a prominent driver of DreamWorks Animation’s expansion.
The new media segment that includes Awesomeness TV more than tripled revenue from the year-earlier period. In October, Awesomeness TV entered into a multi-year international partnership with the Endemol Shine Group.
Business has improved in DreamWorks Animation’s consumer-products business, which the company downgraded guidance last quarter, the executives said. In August the company pulled back from a goal of doubling revenue, citing the strong dollar and slower rollout of its DreamPlace mall-based themed experience.
The company continued to absorb restructuring costs. A $3.6 million pre-tax charge pushed DreamWorks Animation into a net loss of $3.5 million for the quarter ended Sept. 30.