A solid showing for animal tale
at the Memorial Day weekend box office didn't do much to stimulate
Shares in the Glendale, Calif.-based company were trading down 7.5% to $30.21 after Lehman Brothers downgraded the stock to equal weight from overweight.
Dreamworks posted weaker-than-expected first-quarter results last month after misgauging DVD shipments for the popular
. Despite record-breaking sales for that film's DVDs in the fourth quarter of 2004, the studio was forced to eat the costs of returns for unsold copies earlier this year. Wall Street reacted in kind, lopping
20% off the stock's value in what amounted to a scolding of CEO Jeffrey Katzenberg and his crew for not disclosing the problem sooner.
Wall Street has been pinning a lot of hope on
and its Memorial Day performance. While it wasn't a redemption the size of 20th Century Fox's
Star Wars: Revenge of the Sith
in terms of banking record returns, Dreamworks' latest computer-generated animation flick managed to earn a respectable $61 million in domestic ticket sales.
Analysts have said in recent weeks that anything over $50 million would be a success, although some analysts were hoping for as much as $80 million. Nonetheless, the showing should convince a once-bitten investment community that the studio is in fighting form and that the market is not as overcrowded as has been feared. After all,
is the only pure-play family picture out in theaters for the next three weeks, which should help it continue to generate the type of numbers investors will look favorably upon.
now looks like a midsized hit sitting somewhere between
A Shark's Tale
Wallace & Gromit: The Curse of the Were Rabbit
from the makers and producers of
is due from Dreamworks Animation in October and has the potential to be a sleeper hit for the studio. Combined, both films should go a ways toward healing last month's