'Madagascar' pumps D'Works Ani quarter

A year after a homevideo shortfall rocked their faith in the company, investors seemed pleased by what prexy Lew Coleman called a “relatively quiet” first quarter for DreamWorks Animation, driven by the solid performance of “Madagascar” on homevideo.

Toon studio earned $12.3 million on $60.7 million in revenue, down sharply from net income of $45.7 million on $167 million in revenue a year ago. But last year’s perf, driven by “Shrek 2,” came with the huge caveat that the blockbuster fell far short of expectations in homevid sales, leading DreamWorks Animation stock to drop 21% and the company to face an SEC inquiry and a raft of shareholder lawsuits.

By contrast, last quarter’s earnings slightly beat the hopes of most Wall Streeters, leading DreamWorks Animation shares to rise 3% in after-hours trading.

Company sold 3.3 million homevid units of “Madagascar” worldwide, primarily in foreign markets, over the winter. That brings total unit sales for the toon to 17.5 million after a strong holiday season. “Madagascar” contributed $30.7 million in revenue.

The 2004 toon “Shark Tale” accounted for $13.1 million in revenue, due largely to international pay TV deals, while library pics generated $16.3 million in revenue.

Overhang from last year’s problems still puts DreamWorks Animation in the red to its homevid distributor Universal — soon to switch to Paramount — for $13.2 million before it can start to earn revenue from “Shrek 2″ again.

Similarly, “Wallace and Gromit: The Curse of the Were-Rabbit” still has $6.7 million in unrecouped revenue for theatrical distributor DreamWorks (now part of Par) and homevideo distrib Universal before it starts generating revenue. Pic, which DWA bought from Aardman Studios, has made $192 million in worldwide B.O. and sold 3.3 million DVDs since its February release. However, Coleman said he doesn’t expect “Wallace” to make “any significant contributions to the company’s earnings.”

Earnings in the current quarter should be slow for DreamWorks Animation as it waits to start collecting money from “Over the Hedge,” which hits theaters May 19. Toon — the first DreamWorks Animation film released by Paramount under the companies’ new distribution deal — enters a very competitive market, opening opposite “The Da Vinci Code” and only three weeks before Disney/Pixar’s “Cars.”

That should make it tough to match up to last year’s “Madagascar,” which bowed opposite “The Longest Yard” in late May and had the family market largely to itself until mid-July. Pic cumed $193 million domestic and $533 million worldwide.

CEO Jeffrey Katzenberg didn’t take part in this quarter’s earnings call.

DreamWorks Animation stock was down 3% at $26 before earnings were announced Tuesday.

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