'Shrek 2' puts $360 mil to studio
“Shrek 2” was a giant in homevideo last quarter, resulting in huge profits for DreamWorks Animation.
Company sold 34 million units of the year’s best B.O. performer, raking in $360 million from that pic alone. “Shark Tale,” which has made nearly $350 million in worldwide box office, brought in $63 million in revenue.
Net income was a whopping $171.7 million for the quarter on $495.7 million in revenue. Company also made $43 million in revenue from its library titles, because the re-issue of the original “Shrek” sold an extra 9 million DVDs.
DreamWorks Animation makes most of its revenue off pics later in the release cycle as it has to reimburse DreamWorks for marketing and distribution costs before bringing in money itself, minus an 8% distribution fee to the studio.
Chief financial officer Kris Leslie said “Shrek 2” is on track to sell 55 million homevid units, meaning the current quarter will likely be strong for DreamWorks Animation as well with another 20 million DVD sales, although company didn’t provide guidance.
Mad about ‘Madagascar’
CEO Jeffrey Katzenberg sounded optimistic about May’s “Madagascar,” saying it’s tracking as well as the first “Shrek” pic. Chief operating officer Ann Daly said the company has “more modest box office expectations” for October’s stop motion “Wallace and Gromit” movie from Ardman.
2006, when DreamWorks has “Over the Hedge” and “Flushed Away,” looks to be tightly packed with seven or eight CGI releases from Sony, Fox, Pixar and others, but Katzenberg said analyst concern was overblown.
“It’s a fiction that seven CG movies in a year will diminish quality or ability for these movies to have their moment in the marketplace,” he told Daily Variety.
“Shrek 3” is due to be released in 2007 and company is already in development on “Shrek 4” for 2010. Katzenberg indicated that if “Madagascar” performs well, a sequel would likely be on tap for 2008.
DreamWorks Animation shares closed up 2% Thursday at $38.35 before earnings were announced.