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DreamWorks Flushed Into a Loss

A write-off of a box office fizzle hits the bottom line, though results top forecasts.
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Fourth-quarter profits at

DreamWorks Animation

(DWA)

got flushed away, but the animation studio still managed to beat expectations on Wall Street.

The company recorded a loss of $21.3 million, or 20 cents a share for the quarter, as results were pulled down by a charge of 80 cents a share on the partial write-off of film costs for

Flushed Away

, the company's animated film that was a box office fizzle.

A year earlier, DreamWorks recorded earnings of $63.2 million, or 61 cents a share, bolstered by a tax benefit and strong sales of its

Madagascar

DVD.

DreamWorks' fourth-quarter revenue increased 18% to $204.3 million from $172.9 million in the prior-year period, driven by the DVD release of

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.

Analysts had expected a loss of 42 cents a share on sales of $158.9 million, according to consensus estimates reported by Thomson First Call.

Flushed Away

fell short of the company's "financial expectations despite critical acclaim," said DreamWorks in a press release. "Its performance offset what was otherwise a strong year for the rest of our titles, especially in the home video market."

Looking ahead, DreamWorks said it expects full-year results to be driven by

Shrek the Third

, which is set for release on May 18. Its second film for 2007,

Bee Movie

, is slated for release on Nov. 2, but revenue resulting from that will mostly be recorded in 2008.

Shares of DreamWorks closed down 84 cents, or 3%, to $26.80 during a sharp selloff in the broader stock market.