DreamWorks Animation reported stronger third quarter results Wednesday, thanks to the performance of the “How to Train Your Dragon” sequel.
The toon studio posted $180.9 million in revenue and $11.9 million in net profits, compared to $154.5 million in sales and $10.1 million in profits during the September period last year.
“The third quarter of 2014 was strong for DreamWorks Animation, with both quarterly revenue and earnings per share up 17% in a year-over-year comparison,” said Jeffrey Katzenberg, CEO of DreamWorks Animation. Driving the company’s third quarter results is the blockbuster performance of How to Train Your Dragon 2, which has reached over $615 million at the worldwide box office to become the highest-grossing animated film of the year.”
Films generated sales of $142.4 million and segment gross profit of $64.3 million to the third quarter, with “How to Train Your Dragon 2” contributing $74.2 million in revenue as it continues to play worldwide.
“Turbo,” “The Croods” and “Rise of the Guardians” generated $12.7 million, $1.8 million and $3.5 million, respectively, mostly through homevideo sales. Sales for “Mr. Peabody and Sherman,” which recently hit home entertainment platforms have been slower than expected. The film also underperformed at the box office, earning $273 million worldwide.
Library titles earned $50.2 million, while the TV segment generated $14.3 million and gross profits of $2.3 million, mainly from Classic Media content, the “Turbo F.A.S.T.” series on Netflix and “DreamWorks Dragons: Riders of Berk” on Cartoon Network. The company has greenlit 10 series to launch over the next two years, and is looking at a three-season run on most of those series with up to 70 episodes.
Consumer products added another $12.1 million and $4.2 million in profits, while AwesomenessTV helped add $12.1 million and $1.2 million in profits.
Awesomeness is now looking at Classic Media’s library of characters and adapted Richie Rich into a live action series that Netflix has picked up.
“You can see a lot more of that coming from (AwesomenessTV chief Brian Robbins) in the future,” Katzenberg said in a conference call with analysts.
Katzenberg said the value of the company “is becoming more clear,” especially as the company invests more in five specific areas — television; consumer products; location-based and retail opportunities; digital (primarily through AwesomenessTV); and Oriental DreamWorks, a China-based studio that is up and running and has hired a staff of 250.
DreamWorks also said it will reduce the production costs of its animated movies, which should help boost profits per picture, something Katzenberg has discussed before. On the marketing front, Katzenberg said television remains key to market its films, generating 90% of awareness for new releases.
Katzenberg noted how some of the new superhero movies Marvel Studios announced at a fan event Tuesday will be launched around the same dates as some of DWA’s releases.
“Some of those conflict,” Katzenberg said. “We have a release schedule and there will be flexibility in that release schedule.”
Expectations for non-sequel films like “B.O.O.: Bureau of Otherworldly Operations,” “Trolls” and “Boss Baby””are high” with each one, Katzenberg said, especially when it comes to the consumer products potential with “Trolls.” He called it the biggest consumer products opportunity for the company “ever,” even comparing it to “The Lego Movie.”
“I’m not as nervous about the original titles” as some analysts, he said.
DreamWorks Animation’s stock fell nearly 2% on Wednesday, dragged down by the rest of the market to close at $23.29, losing 46 cents, but gained $1.11 within hours after the close of the trading day, up 4.8%.