Excluding restructuring-related charges and other items, the company reported a profit of two cents a share. Analysts on average had expected a loss of 5 cents per share.
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Revenue for the period climbed 43.3% to $259 million, while operating income was $27 million and net income topped out at $1.4 million.
Following failed merger talks with Japanese telecommunications giant SoftBank Corp. and Rhode Island-based toy maker Hasbro Inc., DreamWorks Animation moved to cut 500 jobs, or about one-fifth of the studio’s workforce, close its Redwood City, Calif., animation studio, and trim its management ranks, including three of Chief Executive Jeffrey Katzenberg’s deputies. Its Home movie has made $386 million at the box office and contributed feature-film segment revenue of $49.7 million for the quarter. Shares of Dreamworks surged 15% in after-hours trading. The company reported ($0.04) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of ($0.03) by $0.01.
The performance of “Home” on home entertainment platforms helped drive the results of Dreamworks Animation’s film segment, becoming its biggest title in terms of digital purchases. They said they now expect the studio will earn $30 million this year.
“It’s a great way to diversify, a lot more visibility, a lot more consistency, which is a good shift away from the lumpiness of feature films”, B. Riley & Co analyst Eric Wold said. Wold, who has a buy rating on the stock, said “while still early in the restructuring process, we are increasingly confident in our upgrade in August, with management re-focused heading into 2016”.
The new-media segment, which includes DreamWorks’ digital-video holdings, had revenues of $20.7 million, compared with last year’s $8.5 million. Licensing revenue more than tripled to $50.7 million.
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Under the multi-year deal, Endemol Shine Group’s premium channel network (PCN) Endemol Beyond will launch local language, owned and operated AwesomenessTV channels in key markets outside the USA, including the United Kingdom, France, Germany, Spain, and Brazil. Finally, CLSA dropped their price target on Dreamworks Animation Skg from $17.00 to $11.00 and set a sell rating for the company in a research note on Friday, September 11th.
