'SHREK 2' BLAMED SECOND-QUARTER LOSS FOR DREAMWORKS.Byline: Greg Hernandez Staff Writer GLENDALE - DreamWorks Animation SKG SKG Stichting Kwaliteit Gevelbouw (Dutch) SKG Spielberg, Katzenberg,and Geffen (DreamWorks Studios) SKG Thessaloniki, Greece - Thessaloniki (Airport Code) SKG Smith and Kraus Global Inc. reported a second-quarter loss on Thursday, but it was not as big as the studio behind ``Shrek 2'' and ``Madagascar'' had previously feared. The main culprit behind the company's woes this year has been the unexpectedly high number of retail returns of DVD DVD: see digital versatile disc. DVD in full digital video disc or digital versatile disc Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. copies of ``Shrek 2,'' even though it has been the biggest-selling home video title of 2005. The company posted a net loss of $3.7 million, or 4 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared with a profit of $146.1 million, or $1.89 per share, during the second quarter of 2004. Analysts had expected a loss of 7 cents a share. For the second quarter ended June 30, revenue totaled $35.4 million compared to revenue of $300.3 million a year ago when it was riding the theatrical box office tidal wave tidal wave, term properly applied to the crest of a tide as it moves around the earth. The wavelike upstream rush of water caused by the incoming tide in some locations is known as a tidal bore. of ``Shrek 2.'' DreamWorks ran afoul of a·foul of prep. 1. In or into collision, entanglement, or conflict with. 2. Up against; in trouble with: ran afoul of the law. Wall Street in May when its first-quarter earnings fell well below estimates because of the ``Shrek 2'' DVD sales shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. , which caught the studio off guard. The company had warned of a second-quarter loss last month of between 7 cents and 9 cents per share. Chief Executive Officer Jeffrey Katzenberg said the actual numbers came out slightly ahead of that forecast due to the strength of consumer products related to ``Madagascar'' and of home video library titles. ``While we continue to analyze changing trends in the home video market, the performance of our 2004 releases is strong,'' Katzenberg said. ```Shrek 2' remains one of the best-selling best·sell·er also best seller n. A product, such as a book, that is among those sold in the largest numbers. best home video releases of all time and `Shark Tale' is the second-highest-selling DVD of 2005.'' Its next home video release will be ``Madagascar,'' which hits stores Nov. 15. ``Madagascar,'' released during the Memorial Day weekend, has played strongly throughout the summer and has grossed just less than $190 million domestically. The film's international gross is at $240 million for a worldwide tally of $430 million to date, with such territories as Japan and Italy still set to release the picture. DreamWorks, Pixar Animation Studios Animation studio can refer to:
Disney, Walter Elias Disney Co. have all recently cited a shift in home video sales trends that have resulted in lower-than-expected sales. ``We all know the movie business is, by nature, hard to predict,'' Chairman Roger Enrico told analysts. ``It's reasonable to conclude that recent changes in the home video (business) caught us and many others in our industry by surprise.'' Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. Anne Daly said the company has conducted ``extensive analysis,'' but said it is too early to draw any definitive conclusions. ``It appears that titles are being managed differently at retail,'' Daly said. ``It could be the (increasing) number of titles and impact on shelf space. We think this could be contributing to the lower sell-through and higher returns.'' Daly added that while television series boxed sets and the release of classic movie titles are at an all-time high, she does not believe the current pace is sustainable and that the home video market is still being driven by hit new theatrical releases. ``We believe this plays to our advantage,'' Daly said. Chief Financial Officer Kristina Leslie said the company does not expect to recognize any revenue from ``Madagascar'' until the fourth quarter of the current fiscal year and said the company still expects to bring in earnings of 80 to 90 cents per share for 2005. Leslie said the company's upcoming Oct. 7 theatrical release, ``Wallace & Grommit: Curse Curse Ancient Mariner cursed by the crew because his slaying of the albatross is causing their deaths. [Br. Poetry: Coleridge The Rime of the Ancient Mariner] Andvari king of the dwarfs; his malediction spurs many events in the of the Were-Rabbit,'' will not have a negative impact on the year as long as it grosses at least $170 million or higher in worldwide box office. Last month, DreamWorks announced that it had entered into a two-year pact with McDonalds Corp. that will kick off in 2007 with ``Shrek 3'' and another film that year, then two films in 2008. DreamWorks will continue to work with Burger King until then. ``Everything about it is a home run for us,'' said Katzenberg, citing McDonalds' massive market reach and connection to the family audience. DreamWorks' earnings were reported after the close of the market. Its shares had risen by 33 cents Thursday to close at $24.11 on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . Shares rose another 2.9 percent or 69 cents in after-hours trading after-hours trading The trading of securities after the exchanges are closed. After-hours trading often refers to trading a listed security in the over-the-counter market after the exchanges have been closed for the day. . Greg Hernandez, (818) 713-3758 greg.hernandez(at)dailynews.com CAPTION(S): 2 photos Photo: (1 -- color) Consumer products related to DreamWorks Animation SKG Inc.'s ``Madagascar'' helped keep the firm's losses down. (2 -- color) DreamWorks' next home video release is ``Madagascar'' on Nov. 15. It's grossed $430 million in theaters. |
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