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DreamWorks Animation Profitable in Q4 Despite $13.5 Million ‘Turbo’ Loss

DreamWorks Animation said that 24% of its revenue last year came from non-film related sales, a revealing figure as the company expands beyond its core business of movie and more into television, live events, consumer products and online video. 

DWA reported fourth quarter sales of $204.3 million, down from $265.6 million, and profits of $17.2 million, up from a loss of $82.7 million.

Sales came in at $706.9 million and profits of $55.1 million for the full year, compared to revenue of $749.8 million and a loss of $36.4 million in 2012.

“We made significant progress in 2013, transforming and positioning DreamWorks Animation for long-term success as a diversified family entertainment company,” said Jeffrey Katzenberg, CEO of DreamWorks Animation. “In 2014, we have three great feature film releases, led by ‘Mr. Peabody & Sherman’ on March 7, followed by the sequel to one of our most beloved films, ‘How to Train Your Dragon 2’ in June, and ‘Home,’ November, which has an incredible voice cast led by Rihanna and Jim Parsons. Beyond our feature films we plan to continue to invest in our television, consumer products, digital and location-based entertainment businesses, where we believe there are significant growth opportunities for our company going forward.”

DreamWorks Animation posted a $13.5 million writedown during the fourth quarter, due to the disappointing performance of “Turbo,” the toon studio said Tuesday as it discussed its quarterly and full year results. Company also took an impairment charge of $6.7 million from the production of a “Rocky and Bullwinkle” short that was to play in front of “Mr. Peabody & Sherman.” 

Katzenberg called the “Turbo” writedown “modest,” after the film “fell short of our expecations,” he said during a call with analysts.

DWA also reported profits of $6.4 million from the sale of a social app, the company said. 

Despite branching out into other areas, including original online programming through its purchase of AwesomenessTV, the film division is still DWA’s biggest moneymaker earning $127.9 million in revenue and gross profits of $53.4 million during the fourth quarter.

“Turbo” has earned $282.6 million worldwide since July 17, 2013, and has sold 3.3 million units since it was released on homevideo on Nov. 12. It generated $1.6 million in the fourth quarter.

“The Croods” earned $59.7 million in the quarter, primarily from home entertainment. It’s sold significantly more copies — 6.7 million since Oct. 1. 

“Rise of the Guardians” earned $8.5 million in the quarter, primarily from television and home entertainment. The film has sold 5.2 million units on homevid through the end of 2013.

Meanwhile, “Madagascar 3: Europe’s Most Wanted” earned $11.4 million during the three-month period, also primarily from home entertainment. The film has sold 8.8 million units on homevid worldwide.

DWA’s film library earned $46.8 million during the quarter.

Its TV arm earned $47.1 million and profits of $7.3 million during the period from Classic Media and DreamWorks holiday specials, and the “Dragons: Riders of Berk” series on on Cartoon Network.

DreamWorks isn’t expected to deliver its next kids series to Netflix until the fourth quarter of 2014. Netflix has told DreamWorks that “Turbo F.A.S.T.” is on track to be one of the most popular series ever on its platform, Katzenberg said.

The company also earned $12.4 million in revenue and profits of $2 million during the quarter from mostly consumer products tied to Classic Media characters.

Streaming rights of “Shrek The Musical” generated much of the $16.8 million and $2.3 million in profits for DWA’s other categories.

DWA expects much of its revenue this year to come from the theatrical releases of “Mr. Peabody & Sherman,” “Home,” formerly “Happy Smekday!” and “How to Train Your Dragon 2.”

Katzenberg announced that Rihanna will create a concept album for “Home,” that will be released in November.

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