DreamWorks Animation Falls on Loss; SEC Probes Writedown
DreamWorks Animation SKG Inc. (DWA), the independent cartoon-movie studio, posted a second-quarter loss and said securities regulators are investigating a writedown. The shares fell the most in five months.
Executives said on a conference call yesterday that the U.S. Securities and Exchange Commission is looking into how the company wrote down its “Turbo” inventory, without being more specific. They said DreamWorks Animation learned of the investigation in the second quarter and is cooperating. They declined to elaborate further.
DreamWorks Animation, based in Glendale, California, dropped 12 percent to $19.98 at the close in New York, for the biggest decline since Feb 26. The company posted a larger-than-projected quarterly loss and sales that fell short of analysts’ forecasts. The stock is down 44 percent this year.
The company, led by co-founder Jeffrey Katzenberg, has struggled to recoup its costs on recent films such as “Turbo,” a summer 2013 movie that led to a writedown.
The studio’s current theatrical film, “How to Train Your Dragon 2,” has generated $424.6 million in worldwide box office sales, according to Box Office Mojo, a sum that’s shared with theaters and the company’s distributor, 21st Century Fox Inc. The movie was released with two weeks left in the quarter and is still playing in cinemas.
“It will be a highly profitable film for the company,” Katzenberg said yesterday in a statement.
DreamWorks Animation reported a second-quarter loss of $15.4 million, or 18 cents a share, compared with a profit of $22.3 million, or 26 cents, a year ago. Analysts were forecasting a loss of 2 cents, excluding some items, the average of 12 estimates compiled by Bloomberg.
Sales tumbled 43 percent from a year earlier to $122.3 million, missing forecasts of $139.4 million.
To contact the editors responsible for this story: Anthony Palazzo at email@example.com James Callan, Stephen West