Shares of the Hollywood studio fell 7.5 percent to $32.55 in
extended trading after the company also said it took a charge
related to the poor performance of "Turbo."
"Turbo faced one of the most competitive feature film
environments we have seen," Chief Executive Jeffrey Katzenberg
said on a conference call with analysts.
"While it performed fairly well during the fourth quarter at the
international box office and its home video release, it still
fell short of our expectations."
"Turbo", an animated movie about a garden snail that races in
NASCAR, had a slow start in the U.S. theaters after its release
in July pit it against rival studios' films such as "Monsters
University" and "Despicable Me 2".
DreamWorks said on Tuesday that it expects its full-year 2014
results to be helped by the release of "Mr. Peabody & Sherman"
in March in the United States and "How to Train Your Dragon 2"
The company has released "Mr. Peabody & Sherman" in the UK,
France and Argentina to take advantage of the school holidays.
But, the studio does not expect a significant contribution to
revenue in the first-quarter from the movie, which is about an
animated comedy about a talking genius dog and the boy he
"Turbo" had a slow start at the U.S. theaters, prompting several
analysts to forecast a writedown on the film in the second or
the third quarter.
DreamWorks avoided that, but on Tuesday said the movie's poor
performance during the last two months of the fourth quarter
ended December 31 forced it to take an impairment charge of
$13.5 million, or 12 cents per share.
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The company also took an impairment charge of about 6 cents per
share related to a short movie, "Rocky and Bullwinkle".
DreamWorks reported net income of $17.3 million, or 20 cents per
share in the fourth quarter, compared with a loss of $82.7 million,
or 98 cents per share, a year earlier.
Revenue fell 22.8 percent to $204.3 million.
Excluding the two charges and a gain the company earned 33 cents a
Analysts on average had expected earnings of 32 cents per share, on
revenue of $223.2 million, according to Thomson Reuters I/B/E/S.
In December, Netflix Inc began streaming "Turbo: F.A.S.T" -
DreamWorks' first animated series for the video streaming service
"We do not expect to deliver additional series beyond "Turbo:
F.A.S.T" to Netflix until the fourth Quarter of 2014," Chief
Finacial Officer Lew Coleman said on the call.
Coleman said the company would incur marketing costs related to the
series, which follows the snail's story after its triumphant return
from the Indianapolis 500 race.
DreamWorks spent about $135 million to make "Turbo". The movie has
so far grossed about $282.6 million in receipts, according to Box
Office Mojo, a website that tracks theater ticket sales.
DreamWorks shares closed at $35.20 on the Nasdaq on Tuesday.
(Editing by Savio D'Souza)
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