DreamWorks Posts Profit, Delays Release of 'Shrek 3'
By MERISSA MARR
Staff Reporter of THE WALL STREET JOURNAL
December 9, 2004; Page B2
The blockbuster hit "Shrek 2" powered DreamWorks Animation SKG Inc. into the black in the third quarter, but the animation studio said it was pushing back the release of its next "Shrek" movie by six months, until the summer of 2007.
In its first results since its initial public offering in October, DreamWorks Animation posted net income of $20.3 million in the quarter ended Sept. 30, compared with a net loss of $35.9 million a year earlier, as revenue jumped to $241.3 million from $47.8 million.
After pro forma taxes, net income was $13.7 million, in line with what the company earlier indicated in its IPO prospectus.
Anxious to protect its prized asset, DreamWorks Animation said it was switching the release date of "Shrek 3" to May 2007 to secure a slot in the busy summer season. The move follows a similar switch by archrival Pixar Animation Studios, which earlier this week delayed the release of "Cars" until the summer of 2006. "Shrek 3" was originally scheduled for release in November 2006, but DreamWorks decided it wanted to release it on the same date as the first two movies. DreamWorks Animation said it also was shifting its movie "Flushed Away," about a rat in a London sewer, to November 2006 to take advantage of a recently vacated slot.
DreamWorks Animation Chief Executive Jeffrey Katzenberg said the "Shrek 3" maneuver "will enhance revenue potential well in excess of 15%."
However, the move sent DreamWorks shares lower in after-hours trading yesterday to $37.50. DreamWorks shares have moved almost 50% higher since the company was spun off and floated on the New York Stock Exchange, vaulting its valuation to $4.4 billion.
That compares with $5.3 billion for Pixar, the studio behind "The Incredibles" that is often referred to as the gold standard of computer animation.
DreamWorks hit box office and DVD gold this year with "Shrek 2," which ranks as the year's number one movie with around $900 million of tickets and more than 30 million DVDs sold world-wide.
The studio said it expected to end up selling in excess of 55 million DVDs.
It also has had a solid run with undersea adventure "Shark Tale" and expects that movie to sell more than $350 million of tickets at the box office world-wide.
Attention now is turning to its next movie "Madagascar," about a group of animals from New York's Central Park zoo that end up being ship-wrecked. The movie is scheduled to hit theaters next May, the official kick-off of the fiercely contested summer season. Mr. Katzenberg, one of the original founders of DreamWorks, said the Glendale, Calif.-based studio plans to make two movies a year -- one original and one sequel -- and currently has seven films in various stages of production. He said the studio didn't have any more plans for television after the tepid performance of "Father of the Pride," which sputtered on General Electric Co.'s NBC network this fall.
By MERISSA MARR
Staff Reporter of THE WALL STREET JOURNAL
December 9, 2004; Page B2
The blockbuster hit "Shrek 2" powered DreamWorks Animation SKG Inc. into the black in the third quarter, but the animation studio said it was pushing back the release of its next "Shrek" movie by six months, until the summer of 2007.
In its first results since its initial public offering in October, DreamWorks Animation posted net income of $20.3 million in the quarter ended Sept. 30, compared with a net loss of $35.9 million a year earlier, as revenue jumped to $241.3 million from $47.8 million.
After pro forma taxes, net income was $13.7 million, in line with what the company earlier indicated in its IPO prospectus.
Anxious to protect its prized asset, DreamWorks Animation said it was switching the release date of "Shrek 3" to May 2007 to secure a slot in the busy summer season. The move follows a similar switch by archrival Pixar Animation Studios, which earlier this week delayed the release of "Cars" until the summer of 2006. "Shrek 3" was originally scheduled for release in November 2006, but DreamWorks decided it wanted to release it on the same date as the first two movies. DreamWorks Animation said it also was shifting its movie "Flushed Away," about a rat in a London sewer, to November 2006 to take advantage of a recently vacated slot.
DreamWorks Animation Chief Executive Jeffrey Katzenberg said the "Shrek 3" maneuver "will enhance revenue potential well in excess of 15%."
However, the move sent DreamWorks shares lower in after-hours trading yesterday to $37.50. DreamWorks shares have moved almost 50% higher since the company was spun off and floated on the New York Stock Exchange, vaulting its valuation to $4.4 billion.
That compares with $5.3 billion for Pixar, the studio behind "The Incredibles" that is often referred to as the gold standard of computer animation.
DreamWorks hit box office and DVD gold this year with "Shrek 2," which ranks as the year's number one movie with around $900 million of tickets and more than 30 million DVDs sold world-wide.
The studio said it expected to end up selling in excess of 55 million DVDs.
It also has had a solid run with undersea adventure "Shark Tale" and expects that movie to sell more than $350 million of tickets at the box office world-wide.
Attention now is turning to its next movie "Madagascar," about a group of animals from New York's Central Park zoo that end up being ship-wrecked. The movie is scheduled to hit theaters next May, the official kick-off of the fiercely contested summer season. Mr. Katzenberg, one of the original founders of DreamWorks, said the Glendale, Calif.-based studio plans to make two movies a year -- one original and one sequel -- and currently has seven films in various stages of production. He said the studio didn't have any more plans for television after the tepid performance of "Father of the Pride," which sputtered on General Electric Co.'s NBC network this fall.