DreamWorks Posts Loss as 'Guardians' Movie Disappoints

Tuesday, 26 Feb 2013 05:14 PM


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Movie studio DreamWorks Animation SKG Inc reported a quarterly loss, hurt by a weak box office performance for "Rise of the Guardians", an animated adventure fantasy featuring the voices of Alec Baldwin, Hugh Jackman and Jude Law.

DreamWorks said it wrote down about $87 million in costs related to the film and took a $54 million charge as it decided to return "Me & My Shadow" back to development, pushing the company to its first quarterly loss in almost six years.

The animation studio behind the hugely successful "Shrek" and "Kung Fu Panda" franchises had hoped its fourth quarter would be driven by strong performance of the "Rise of the Guardians" from Thanksgiving to the Christmas holidays.

"Rise of the Guardians", which released in November, grossed $302.3 million at the worldwide box office. It contributed only 2 percent to DreamWorks' total revenue in the quarter.

"While Rise of the Guardians did not achieve the level of box office success that we have come to expect from a DreamWorks Animation film, we have made several changes to our future slate ... ," Chief Executive Jeffrey Katzenberg said in a statement.

The film, based on William Joyce's "The Guardians of Childhood" book series, tracks the adventures of a carefree boy.

"Skyfall," starring Daniel Craig in the 23rd installment of the James Bond franchise, and teen vampire film "The Twilight Saga: Breaking Dawn - Part 2," both of which released in November, trumped "Rise of the Guardians" at the box office.

The movie was the last distributed by Paramount for DreamWorks. The studio's films will now be distributed by News Corp's Fox studio.

DreamWorks' next film "The Croods" is slated to release on March 22. The comedy adventure tracks a prehistoric family on a road trip and features voices of Nicholas Cage and Ryan Reynolds among others.

The continued success of "Madagascar 3: Europe's Most Wanted", primarily from home entertainment and international box office, contributed about 36 percent to fourth-quarter revenue.

DreamWorks shares, which have fallen about 7 percent in the last three months, were down 3 percent in after-market trading on Tuesday. They closed at $16.61 on the Nasdaq.



The net loss was $82.7 million, or 98 cents per share, in the fourth quarter, compared with a profit of $24.3 million, or 29 cents per share, a year earlier.

The company said it took a charge of about $165 million during the quarter, which includes the write-down related to "Rise of the Guardians" and the charge related to "Me & My Shadow".

Revenue at the company, which competes with Walt Disney Co's Pixar among others, rose 21 percent to $264.7 million.

Analysts had expected revenue of $216 million, according to Thomson Reuters I/B/E/S.

© 2014 Thomson/Reuters. All rights reserved.

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