DreamWorks Animation Restructuring Brings Quarterly Losses

Alien adventure “Home” lifted quarterly revenues at DreamWorks Animation, though the fallout from the troubled studio’s ongoing restructuring resulted in a net loss for the period.

The animation studio has undergone a series of deep staff cuts and the sales of its Glendale, Calif., headquarters as it tries to get out from under a number of film flops. “Home” helped reverse that downward trajectory when it stunned prognosticators last spring by racking up $386 million globally.

Fueled by those ticket sales, revenues for the three-month period ending in June hit $170.8 million, nearly a 40% increase from the year-ago period, when the company was reeling from the failure of “Mr. Peabody and Sherman.” Revenue results also beat analyst forecasts of $167 million.

In addition, the studio reported an operating loss of $21.8 million and net loss of $38.6 million, or 45 cents per share for the quarter. That’s deeper than the net loss of $15.4 million and 18 cents that the company reported during the same period a year ago. It’s also worse than projections of a net loss of 24 cents a share.

On an adjusted basis, taking out those restructuring costs, the picture brightens. Losses in that case stand at $1 million or around 13 cents a share.

“While there is still much work to be done, I’m really proud of what our team has accomplished this quarter,” DreamWorks Animation CEO Jeffrey Katzenberg said during a Tuesday earnings call, describing 2015 as a “transitional year.”

The studio’s reorganization led to 500 layoffs and shuffling of several film titles. That means that DreamWorks will not release another theatrical film until “Kung Fu Panda 3” debuts in January.

Thanks to “Home,” DreamWorks Animation’s biggest hit since “The Croods” in 2013, revenues for the feature film segment increased 26% to $87.8 million, up from $69.7 million in the year-ago period. In a call with analysts, Katzenberg told analysts and investors that the home entertainment debut of “Penguins of Madagascar” was softer than expected and said that the company’s merchandising results were not as robust as he had hoped. Revenues from the consumer products operation for the first half of 2015 fell from $30.7 million to $27.8 million.

DreamWorks Animation’s stock slid slightly in after-hours trading, after closing up 0.76% at $23.99.

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