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Mixed Buzz Circles DreamWorks' Bee Movie

Miller told in May that Bee Movie would have to do at least $250 million in box-office revenue worldwide in order to keep shares of DreamWorks trading over the $30 mark. Now, he expects the movie to bring in $320 million worldwide and $170 million domestically, but not everyone agrees.

In a note to clients on Monday, Cowen & Co. analyst Doug Creutz called the movie's performance "somewhat disappointing" so far, "despite a ubiquitous marketing campaign" from Seinfeld, who also stars in the movie as the voice of its winged protagonist, Barry B. Benson.

The movie "has continued to underperform at the box office and we now expect the film to earn $130 million in ultimate domestic box office, down from $166 million," said Creutz. "As a result, we do not expect the film to contribute meaningful profits to DreamWorks Animation during its lifetime."

As a result, Creutz reduced his 2007 revenue estimate for the company to $782.9 million from $783.4 million. He also lowered his 2007 earnings per share estimate to $2.18 from $2.19.

Analysts, on average, are expecting DreamWorks to post earnings for the year of $2.19 a share on revenue of $800.1 million.

Meanwhile, Creutz made more dramatic cuts to his 2008 outlook. Next year, he expects the company to report $591 million in revenue and $1.11 a share in earnings. Previously, he was expecting 2008 revenue of $667.3 million and earnings of $1.47 a share.

Analysts' average estimates call for revenue of $727.3 million and earnings of $1.76 a share next year.

Creutz's negative outlook comes at a time when the stock market is buckling under concerns about consumer spending and economic growth amid the downturn of the U.S. housing market. He holds a neutral rating on the stock, noting headwinds for the company such as increased competition in animated movies, a mixed track record on the quality of its releases and a lack of long-term growth catalysts.

"Based on our long-term view, we believe the shares are unlikely to outperform the market over the next 12 months," said Creutz.
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