THE LION'S SHARE `MADAGASCAR' BOOSTS DREAMWORKS.

Byline: GREG HERNANDEZ Staff Writer

GLENDALE - ``Madagascar'' is the movie hit that keeps on giving as home video and pay television revenue generated by the summer 2005 release helped fuel a better-than-expected second quarter performance for DreamWorks Animation SKG, according to earnings announced Thursday.

DreamWorks reported net income of $13.7 million, or 13 cents a share, compared to a net loss of $3.7 million, or 4 cents per share, a year ago. Revenue was at $74.9 million, more than double the 2005 second quarter when the company reported revenue of $35.4 million.

``Last summer, `Madagascar' was our most successful theatrical release to date for an original film ($193.1 million domestically) and has been one of the top-selling domestic home video titles over the past eight months,'' DreamWorks Animation CEO Jeffrey Katzenberg said during a conference with analysts. ``With its sequel slotted for the fall of 2008, we have been pleased with the success of our next potential franchise.''

During the quarter, ``Madagascar'' contributed approximately $37.9 million of revenue. Since it debuted on home video during last year's fourth quarter, an estimated 18.9 million units have been shipped.

While the company's current release, ``Over the Hedge,'' has grossed $153 million domestically to date and another $125 million in foreign markets, DreamWorks has not yet recouped its investment.

``We do not expect `Over the Hedge' to contribute any significant revenue to the company until later in the year because of the upfront marketing and distribution costs associated with its theatrical release,'' said Kris Leslie, DreamWorks' chief financial officer.

Still, the film did contribute $10.7 million of revenue during the quarter, $4.6 million of which was annual cost reimbursement from Paramount Pictures, which now distributes all DreamWorks Animation releases.

Also contributing to the bottom line was $9.6 million in international pay television revenue generated by ``Shark Tale'' and $3.4 million in home video revenue generated by ``Wallace & Gromit: The Curse of the Were-Rabbit.''

``It appears (`Over the Hedge') performance was affected by the competition,'' Katzenberg acknowledged. ``While it has not achieved the same level of box office as `Madagascar' or our `Shrek' franchise, we do have a strong film.''

``Hedge'' hit theaters in the shadow of one of the summer's biggest hits, ``X-Men: The Last Stand,'' then soon had to go head-to-head with the Pixar-animated film ``Cars,'' which is the year's second-highest grossing release.

Revenue for the remainder of the year is expected to be driven by the performance of ``Over the Hedge,'' however. ``Hedge'' is scheduled for DVD release on Oct. 17, in time for the holiday shopping.

DreamWorks will release its next movie, ``Flushed Away,'' on Nov. 3, and Katzenberg is bullish on its box office prospects.

``There isn't a single family title in the entire month that precedes us and I'm hoping there will be a nice build and demand going into it,'' he said. ``This really looks special and it's got a great look and style to it.''

``Flushed Away'' will be followed by the May 2007 release of the sure-fire blockbuster ``Shrek 3,'' the latest chapter from the company's most successful franchise.

Shares of DreamWorks Animation fell 63 cents, or 3 percent, to close at $20.30 Thursday on the New York Stock Exchange.

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3 photos

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(1 -- 2 -- color) Through home video and pay television, ``Madagascar,'' with the voice talent of Ben Stiller, below, as Alex the Lion, has continued to be a revenue generator for DreamWorks Animation SKG.

(3 -- color) ``Over the Hedge'' has grossed $153 million domestically to date and another $125 million in foreign markets, but DreamWorks has yet to recoup its investment.