UPDATED: With its best revenues in nearly a decade, DreamWorks Animation beat analysts expectations Tuesday — posting earnings of 55 cents a share and adjusted earnings of $56.5 million that more than doubled projections for the fourth quarter of 2015. The company’s shares jumped up by more than $2 per share on the news in after-hours trading to more than $23, an increase of more than 11%.
The positive performance by the animation studio came in a year of multiple challenges: The company reduced its film slate, sold (and leased back) its 15-acre Glendale campus and laid off hundreds of employees.
The company closed the year on a strong note, with revenues in the final quarter hitting $319 million, the best in eight years and well ahead of the projected $274 million, and net income hitting more than $48 million, almost four times analysts’ consensus. DreamWorks also exceeded consensus projections for all of 2015 in both revenue, topping out at $916 million, and operating income, which came in at $78.8 million, compared to analysts’ projection of just $47.4 million. While the stock-watchers had set net income at a negative $15 million, DreamWorks pushed into the black at $7.6 million.
The earnings per share mark of 55 cents topped projections of just 16 cents. It was the fifth straight quarter in which the company exceeded analysts’ expectations.
DreamWorks CEO Jeffrey Katzenberg called 2015 a “transitional year” but said he was proud that the company had exceeded its financial goals. “DWA delivered its best top line result in 11 years and highest revenue growth in eight years, accelerating 34% from 2014,” Katzenberg said in a statement. “In addition, our positive adjusted operating income and operating cash flow demonstrate our commitment to profitably grow our businesses while keeping a sharp eye on cost management and productivity improvements.”
After reorganizing its studio management in 2015 and scaling back to just one film last year (“Home”), the studio has high hopes for 2016. It released “Kung Fu Panda 3” last month and has “Trolls” – with characters voiced by Anna Kendrick, James Corden and Justin Timberlake – coming in November.
“Panda 3” has performed solidly, hauling in nearly $300 million worldwide, with the film open in the U.S., China and a handful of other countries, but yet to open in 74 markets throughout the world. The opening was timed to the Chinese New Year, and “Panda” hauled in $142 million, nearly half of its total, in the Middle Kingdom. The two previous two installments in the “Panda” franchise each took in more than $600 million globally.
Katzenberg explained that the film had originally been timed for the Christmas season, when it would have been forced to compete with Disney’s “Star Wars: The Force Awakens.” Instead, the company moved the film to the “unconventional” Jan. 29 opening date. “Under the circumstances, we believe we have had a successful release of the movie so far,” Katzenberg said.
Katzenberg said the company entered 2016 with “considerable momentum,” adding in a call with analysts: “The best years for DreamWorks remain ahead of us.”