Diversification Changes the Way DreamWorks Animation Discusses Earnings

AwesomenessTV generated $3.6 million in revenue for the company during the third quarter

Turbo Movie

Buying companies like Classic Media and AwesomenessTV, and expanding into new areas of business, has changed the way DreamWorks Animation reports its quarterly results.

“We are introducing four new reporting segments — feature films, television series and specials, consumer products and all other — to align with the ways in which we operate DreamWorks Animation’s business today,” said Lew Coleman, chief financial officer of DreamWorks Animation while announcing the company’s third quarter performance. “Our financial reports will now include revenue and gross profit contributions from these segments, which we believe will also serve to provide more detail behind our growth and diversification efforts going forward.”

DreamWorks’ films generated revenue of $120.7 million and gross profit of $55.4 million for the third quarter, which ended Sept. 30.

“The segment remains at the core of the business,” said DreamWorks Animation CEO Jeffrey Katzenberg during an earnings call with Wall Street analysts.

Despite the disappointing box office performance of “Turbo,” which earned just $82 million domestically and $246 million worldwide, “we believe ‘Turbo’ is a profitable movie,” Katzenberg said, with the $127 million toon set to continue to be promoted on homevideo (out Nov. 12), through a new Netflix series and Mattel toys well into next year. DWA spent between $150 million and $175 million to market the film.

Compare that to “The Croods,” which has grossed more than $587 million worldwide, since March, making it the year’s sixth highest-grossing film. Pic earned $4 million for the studio during the quarter.

Library titles earned $52 million in revenue, with “Rise of the Guardians” bringing in $42 million, mostly from worldwide pay TV deals. It’s sold 4.2 million units on homevideo to date. “Madagascar 3: Europe’s Most Wanted” and “Puss In Boots” generated $10.9 million and $4.8 million during the third quarter, respectively, with the third “Madagascar” moving 8.1 million homevid units and “Puss in Boots” 7.5 million to date.

Overall, DreamWorks generated $10 million in profits, down 58.8% over the same frame last year, on $154.5 million in revenues, off 17%. Sales came in higher than Wall Street expected.

TV series and specials earned $18 million in revenue and $4 million profits, largely from Classic Media-related programming and “DreamWorks Dragons: Riders of Berk “on Cartoon Network.

Consumer products generated $12 million in revenue and $3 million profits during the quarter, primarily from the sale of “Turbo” toys and Classic Media-related merchandise.

AwesomenessTV added $3.6 million in revenue to DreamWorks’s coffers during the quarter in the “all other items” segment. The online entertainment network, which primarily targets teens and tweens, saw its viewership increase 75% during the third quarter to 2.1 billion.

DreamWorks Animation’s stock rose $0.25 on Tuesday to close at $27.82.