DreamWorks Rises After Beating Earnings Estimates on TV Growthby
TV business feasted on home-video releases, Netflix shows
Shares soar 21%, most in 1 1/2 years, paring 2016 losses
DreamWorks Animation SKG Inc., the maker of the “Kung Fu Panda” movies, rose the most in about 1 1/2 years after posting fourth-quarter profit that beat analysts’ estimates on the strength of its TV and home video businesses.
The shares rose 18 percent to $24.94 at 1:55 p.m. in New York Wednesday, after earlier spiking as much as 21 percent, the most intraday since Sept. 29, 2014. The increase helped DreamWorks all but erase its 18 percent stock decline this year.
Earnings excluding some items were 55 cents a share, the Glendale, California-based company said Tuesday in a statement. Analysts predicted 15 cents, the average of estimates compiled by Bloomberg. Revenue was $319.3 million, beating projections of $275.4 million.
The share rally is a shot in the arm for DreamWorks, led by Chief Executive Officer Jeffrey Katzenberg, which last year cut 500 jobs, shelved films and sold its campus in California following several disappointing features. A shift in strategy may be starting to pay off: The company has grown its TV business, focusing on home-video releases and making shows for Netflix Inc., including “Dragons: Race to the Edge” and “Dinotrux.” Its only 2015 theatrical release, “Home,” contributed $55.3 million to feature film segment revenue in the fourth quarter -- primarily from TV and home video.