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‘Boots’ bow kicks DWA stock price

B.O. take underperforms expectations

Life can be tough for a stand-alone studio. Shares of DreamWorks Animation skidded lower Monday after “Puss in Boots” took in $34 million in its opening weekend, topping the domestic box office but falling short of expectations and fueling a trickle of discontent on Wall Street.

Shares fell 7.8% to close at $18.55. Analysts who follow the company were looking for a performance in the mid- to high $40 millions for the “Shrek” spinoff, and a few trimmed their 2011 earnings estimates.

“‘Puss in Boots’ will need a longer tail,” said Anthony DiClemente of Barclay’s Capital, who now figures the pic will gross $145 million — $20 million less than he had anticipated.

“Puss” saw DreamWorks Animation’s lowest opening since “Flushed Away” in 2006 at $19 million.

DWA topper Jeffrey Katzenberg said last week that the hope was for “Puss” to top the current $33.6 million opening weekend record for Halloween. “Anything beyond that goes into the win column,” Katzenberg said then. The pic did beat that mark, but just barely.

DreamWorks Animation puts out films about every six months — “Kung Fu Panda 2” was out last May; next up is “Madagascar 3” in June — and unlike other studios that are relatively small parts of giant media congloms, DWA doesn’t have other businesses to shield it, making its stock vulnerable to what’s perceived as a soft perf at the B.O.

Investors in Viacom, News Corp., Time Warner and Disney tend to focus on cable networks. Only a truly massive dud at the B.O., or a “Titanic” on the upside, can move the stock. Viacom shares, for example, barely budged the Monday after Paramount’s blazing success with low-budget “Paranormal Activity 3.”

A freak snowstorm in the Northeast may have damped the “Puss” opening. If so, DiClemente said, good word of mouth could push the pic to better-than-expected ticket sales. But he’s also expecting “Madagascar 3” to pull in less than the second pic did ($590 million worldwide) owing to competitive pressures in the CGI market and slowing 3D trends.

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