Updated from July 29th to include share price at market open in 2nd paragraph and latest details on SEC investigation in 3rd and 4th.
NEW YORK (TheStreet) -- Only two days after receiving top honors from the White House, DreamWorks (DWA) CEO Jeffrey Katzenberg is not winning much favor on Wall Street. Shares of the movie studio he has helmed for a decade are tanking 12.3% to $19.88 on Wednesday after reporting net losses of 18 cents a share, far wider than analysts' estimates of a loss of 2 cents a share.
Weaker-than-expected box office performance over the three months to June marks the second consecutive quarter of disappointing results, a trend which has sent the stock cratering 42.9% in the year to date (compared to the S&P 500's 6.9% gain). Quarterly revenue of $122.3 million tumbled nearly 43% year over year and fell short of expectations of $138.5 million.
Disappointing results are being compounded by news the company is currently under SEC investigation for a $13.5 million write-down it took in February for Turbo. The 2013 summer family flick, which followed the adventures of snail with super-speed, flopped domestically, generated only $83 million in U.S. and Canadian markets. However, foreign takings of $199 million meant that even if the movie wasn't a hit, it was at least profitable.
Details of the investigation are scant, though DreamWorks CFO Rich Sullivan said on a post-earnings conference call that the company was cooperating with officials.
Investors had expected a tricky three months for the family animation studio given a low-volume turnout for many of the summer's largest blockbusters this quarter. However, hopes were that its major summer flick How to Train Your Dragon 2 could be a reprieve from a series of soft box-office releases. However, with a mid-June opening for DreamWork's only second-quarter theatrical release, the film had to soar in its weekend debut to make up the quarter's deficit.