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‘Kung Fu Panda 3’ Helps DreamWorks Animation Earnings Beat Projections

Kung Fu Panda 3
Courtesy of 20th Century Fox

Kung Fu Panda 3” and growth in its television business powered first quarter earnings at DreamWorks Animation, helping the film studio beat Wall Street projections.

Revenues climbed 14.4% to $190.4 million and the Glendale, Calif., studio reported a net profit of $13.8 million, as opposed to the $54.8 million loss it recorded a year ago. It also logged earnings of 16 cents a share. Analysts expected the company to announce earnings of a cent per share and revenue of $183 million for the quarter, according to Thomson Reuters.

The robust fiscal picture emerges roughly a week after news broke that Comcast had reached a deal to acquire DreamWorks Animation for $4.1 billion in cash and debt assumption. The media conglomerate, which owns NBCUniversal, hopes to create a family film empire to rival Disney’s. It already backs Illumination Entertainment, the creator of the “Despicable Me” franchise.

“I am happy to report another strong quarter of financial results, which I believe reflect continued execution on our strategy of transitioning DreamWorks Animation into a global family entertainment company,” said Jeffrey Katzenberg, chief executive officer of DreamWorks Animation. “I’m excited to be passing the baton to Comcast, as I know they will continue to build on the foundation we’ve established over the past 22 years.”

If regulators approve the deal, Katzenberg will be named chairman of a new entity dubbed DreamWorks New Media, comprising the company’s ownership stakes in AwesomenessTV and Nova. He will also be a consultant to NBCUniversal, but will not be in charge of the film and television operations.

DreamWorks Animation has struggled as a publicly traded company in recent years. Its stock tended to fluctuate with the release of each new film, and the company was overly dependent on box office performance. Most movie studios are small parts of sprawling media empires, which allows them to weather film flops with little impact on their parent company’s share price.

In an attempt to diversify its revenue streams, DreamWorks Animation has moved aggressively into the television space, delivering content to the likes of Netflix. The push paid off, with reneges from the division increasing to $57 million, up from $18.1 million in the prior-year period.

“Kung Fu Panda 3” hit theaters in January and contributed feature film revenue of $30.9 million, while “Home,” the studio’s 2015 hit, add $18.3 million of revenue from home entertainment sales and pay television deals.

DreamWorks Animation doesn’t have another film release until “Trolls,” based on the popular children’s toyline, hits theaters in November. Upcoming projects include “Boss Baby” and “Captain Underpants.”

In a call with investors and analysts after earnings were announced, Katzenberg said that he will continue to guide the studio until the Comcast deal closes.

“Between now and then it is business as usual for us,” he said.

The call itself was hastily performed, lasting ten minutes in length. Katzenberg and DreamWorks executives sped through the financial results without pausing for questions.