'SHREK 2' BOOSTS FIRM'S SALES DREAMWORKS ANIMATION REPORTS VERY STRONG EARNINGS.

Byline: Greg Hernandez Staff Writer

GLENDALE - In its first quarter as a public company, DreamWorks Animation SKG, Inc. reported strong earnings due to the explosive home video sales of ``Shrek 2'' and the strong box office performance of ``Shark Tale.''

For the third quarter 2004 ending Sept. 30, revenue totaled $241.3 million compared to $47.8 million a year earlier, and net income totaled $20.3 million, or 18 cents a share, compared to a net loss of $35.9 million, or 47 cents a share, during the third quarter of 2003.

``DreamWorks animation has really come of age,'' said DreamWorks Animation CEO Jeffrey Katzenberg.

DreamWorks Animation completed its initial public offering Oct. 27 and is now a separate company from DreamWorks Pictures.

The company also announced Wednesday that it has decided to move its release of ``Shrek 3'' from November 2006 to May 2007.

``The sheer magnitude of the Shrek franchise has led us to conclude that a May release date - with a DVD release around the holiday season - will enable us to best maximize performance and increase profitability, thereby generating enhanced asset value and better returns for our shareholders,'' Katzenberg said.

``We are well-positioned in the CG animation market with a distinctive and powerful brand, a world-class, highly experienced creative team, and the scale and resources necessary to produce two high-quality CG films per year,'' he added.

The new release date for ``Shrek 3'' was announced just a day after Pixar Animation Studios and The Walt Disney Co. decided to move the release date of its next film, ``Cars,'' from November 2005 to June 2006.

``No one is going to try and release an animated film in May or June any more other than DreamWorks and Pixar,'' said media analyst Dennis McAlpine of McAlpine Associates. ``But the big difference between DreamWorks and Pixar is DreamWorks is going to try and do two movies a year.''

``Shrek 2'' and ``Shark Tale'' were cash cows for the studio on both the domestic and international fronts. ``Shrek 2,'' which grossed $436 million domestically (the third-highest grossing film ever), has earned an additional $450 million and counting in foreign markets with worldwide receipts expected to top $900 million.

On home video, ``Shrek 2'' has sold more than 30 million units in just over four weeks and the company believes it has the potential to surpass Disney's ``The Lion King'' as the biggest selling video title of all time.

``Shark Tale'' has grossed $160 million domestically and $150 million internationally so far with 18 more territories still to go. It is scheduled to be released on home video in February 2005.

DreamWorks Animation's upcoming release schedule is as follows: ``Madagascar'' (May 27, 2005); ``Wallace & Gromit: Tale of the Were Rabbit'' (Oct. 7, 2005); ``Over the Hedge'' (May 19, 2006); ``Flushed Away'' (fall 2006) and ``Shrek 3'' (May 2007).

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com