‘How to Train Your Dragon 2’ Sends DreamWorks Animation Stock Down

How to Train Your Dragon 2” didn’t prove to be enough of a box office fire-breather for Wall Street, sending the share price of DreamWorks Animation sliding more than 12% on Monday.

The animated sequel opened to $50 million domestically and picked up in an additional $24.8 million from 26 international territories. However, going into the weekend some analysts had predicted that the film would open to north of $60 million. The company’s stock was down more than $3 on Monday morning, trading at $23.94.

While DreamWorks Animation has made steps to branch out into different areas of the media business, buying YouTube powerhouse AwesomenessTV and signing deals with Netflix for instance, the frosty reception from investors demonstrates its fortunes remain inexorably tied to the theatrical performance of a handful of films.

“The stock is definitely going to being volatile to opening weekends given that they only have three movies per year and they’re not diversified enough with TV and other things to help offset weaker openings,” said Eric Wold, an analyst with B. Riley and Co.

Part of the disappointment is that three of the studio’s most recent four films — “Rise of the Guardians,” “Turbo” and “Mr. Peabody and Sherman” — have resulted in write-downs and the “Dragon” sequel was seen as a Tiffany franchise for the studio. Moreover, the summer has been devoid of animated offerings, all of which seemed to signal a huge opening for the film.

Reviews for the sequel were strong, but “22 Jump Street” proved to be a $60 million smash, which likely ate into its box office take. Parents who may have been inclined to take their kids to see “How to Train Your Dragon 2,” could have been convinced to hire a sitter and check out the R-rated comedy instead.

“Where it finishes is more important than where it starts,” said Marla Backer, an analyst with Ascendiant Capital Markets.  “It’s a disappointing debut, but does it signal the film will fall short? I’m not sure.”

A spokeswoman for DreamWorks Animation did not immediately respond to a request for comment. However, it should be noted that the studio’s stock took a tumble following the 2011 openings of the first “How to Train Your Dragon” and “Kung Fu Panda 2,” both of which turned into hits.

Moreover, the studio’s films tend to have legs at the box office. Unlike most major tentpole releases, the pictures are not front-loaded. The first “How to Train Your Dragon” did five times its opening weekend over the course of its domestic run, and there are still several major foreign markets left to open such as China, Brazil and Mexico. The international reception could prove more critically important than the stateside one.

The opening weekend domestic box office, in terms of framing the final global box office, is not what it used to be in terms of importance,” argued Ben Mogil, an analyst with Stifel Nicolaus, in a note to investors.

The film also has a nice runway, given that the next animated film to open, “Planes: Fire & Rescue,” doesn’t land in theaters until July 18. That presents an opportunity to make up lost ground.

For now, Wall Street is watching to see if DreamWorks Animation can turn a sprint into a marathon.

Filed Under:

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 11

Leave a Reply

11 Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

  1. Dj1992 says:

    Frozen 1st weekend domestic 60mn+
    Final tally 400mn+
    Worldwide 1.01bn+
    Life of pi 1st weekend domestic 20mn+
    Final tally 125mn
    Worldwide 608mn+
    and the list goes on…it proves the 1st weekend domestic does not matter a lot..what matters is the content of the movie. I haven’t seen it yet but if it works on the content side the people would like to watch it.. I think investors are being too harsh on the the stock.guys it grossed 58mn in the first weekend that is no way a mess.. i know wall st is full of enthusiasm but i am optimistic about the movie and bullish on the stock

  2. Claire says:

    The thing thats really hurt them though in my opinion is their release dates. Check these dates out: http://www.imdb.com/title/tt1646971/releaseinfo if they had had a more global release they would have taken in a lot more revenue

  3. shobin says:

    Sad! Idiots decide to watch terrible movies like Godzilla and Transformers instead, this movie could be watched by people of any age and still be enjoyed!

  4. It’s a shame that Dream Works is struggling. :c but for the past few films they have released lately, it seems they are very repetitive with each story. (This also includes many shows and movies. )

    I want to become an animator, and seeing one of my favorite companies fall like this makes me upset. I hope for the good, someone will come up with good ideas to save Dream Works.

  5. Andy says:

    I totally missed the gay viking character, and I’m gay! I wonder how I missed that…

  6. Ivan says:

    When will US investors realize that the US opening weekend box office (and the US box office in general), just isn’t as important as it once was.

  7. rocky-o says:

    i think the biggest problem ‘dragon’ had was the fact that, ‘kids’ who would normally be the market for that type of movie, now have all the superheroes they want, and trust me, they see them all…iron man, batman, avengers…and we’re talkin’ pre-schoolers here…today’s kids have more choices than previously, simply because they’re not really thought of as kids anymore…(and if you watch alot of superhero animation, it ain’t exactly what some might refer to as ‘family friendly’ either…)…there’s a reason why pixar regularly crushed disney…they weren’t treating kids like babies…that’s why disney had the good sense to buy them out…now, i’m not saying that any of this is right or wrong for today’s kids, i’m just sayin it is what it is…

  8. Rose says:

    What gay viking? I saw the movie last weekend and didn’t notice a gay viking character.

    • Jason S. says:

      A character in the film utters a line that could have multiple meanings, but the director has confirmed that it was meant to allude to the character being gay. Personally, I think it’s ridiculous & was in no way necessary. Did it ruin my enjoyment of the film? No, but when I heard the line spoken in the film, it took me out of the film for a moment because of the director having confirmed that is what the line meant. Honestly, can’t see where it serves any purpose to the film to make this character gay, so why do it? Personally, I wish I had never seen the articles that brought up this subject, so I might have continued to enjoy the films/tv series without this in my head, but I’ll just try not to think about it as this one minor issue isn’t enough to tarnish how wonderful the actual stories & animation are.

    • Tiffany Elliott says:

      There was apparently going to be a reveal of one character who comes out. I have not seen the film, so I’m not sure which one, or even if the rumor is true.

  9. Dan says:

    Dragons 2 is very AWSOME,one of best movie in summer.

More Film News from Variety

Loading