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DreamWorks Hits Lowered Targets

The animation studio reaffirms guidance for the year.
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met lowered second-quarter targets Thursday and reaffirmed full-year earnings guidance.

For the quarter ended June 30, the Glendale, Calif., animation studio lost $3.7 million, or 4 cents a share, reversing the year-ago profit of $146 million, or $1.89 a share. The latest quarter was aided to the tune of 2 cents a share by a decrease in the valuation allowance associated with its deferred tax assets.

Revenue fell 88% from a year ago to $35.4 million. The results beat the current Wall Street estimates, which called for a 7-cent loss on revenue of $28 million.

"Results for the quarter are slightly ahead of where we said they would be on our July 11 conference call driven by the strength of


consumer products as well as our library," said CEO Jeffrey Katzenberg. "To date,


has performed very well, achieving more than $432 million in worldwide box office, reaching over $242 million internationally.

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"While we continue to analyze changing trends in the home-video market, the performance of our 2004 releases is strong," the CEO added. "

Shrek 2

remains one of the best-selling home-video releases of all time and

Shark Tale

is the second-highest selling DVD of 2005. We are looking forward to


release in the home-video market on November 15, 2005."

DreamWorks also reaffirmed its 2005 earnings guidance of 80 cents to 90 cents a share. The news comes just a month after DreamWorks

warned of its second earnings shortfall in two months, citing marketplace problems with sales of its home-video titles. Before that warning, DreamWorks had previously predicted a break-even quarter. Analysts, meanwhile, had been expecting a full-year profit of $1.39 a share.

Late Thursday, DreamWorks shares rose 39 cents to $24.50.