DreamWorks Posts Big Beat

Earnings fall but are 12 cents ahead of EPS estimates.
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Cartoon factory

DreamWorks Animation

(DWA)

reported smaller first-quarter earnings but beat expectations Tuesday on strong home video sales.

The Glendale, Calif., company, producer of the

Shrek

franchise, made $12.3 million, or 12 cents per share, for the quarter ended March 31. That compares with a year-ago $45.7 million, or 44 cents per share.

First quarter results in 2005 benefited from the DVD release of

Shrek2

.

The company reported revenue of $60.1 million in the latest quarter.

Analysts surveyed by Thomson Financial had expected the company to break even on $62 million in revenue.

"The quarter's results were primarily driven by the home video performance of

Madagascar

," said Chief Executive Jeffrey Katzenberg. "During its initial release the title performed well in a highly competitive home video market." Madagascar contributed about $30.7 million of revenue in the quarter, the company said.

Over the Hedge

, the company's next big release, is slated for the weekend of May 19, and has received a healthy amount of positive buzz. It will be the first film from the company under a new distribution agreement with

Viacom's

(VIA) - Get Report

Paramount, which purchased sibling live-action company Dreamworks SKG several months ago.

Looking forward, the company expects the balance of 2006 to be primarily driven by the theatrical and home video performance of

Over the Hedge

.

Wall Street analysts expect DreamWorks Animation to earn 2 cents a share on $52 million in revenue during the second quarter.

On Tuesday DreamWorks Animation shares fell 73 cents to $26.02.