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"Home" run, licensing fees power DreamWorks blockbuster show
[NEW YORK] Hollywood studio DreamWorks Animation SKG Inc reported better-than-expected quarterly revenue and profit, helped by the worldwide television release of its movie "Home" and higher licensing fees.
Shares of the company, which produced the popular "Shrek"and "Kung Fu Panda" movies, rose 9.2 per cent to US$23 in after-hours trading on Tuesday.
DreamWorks has been reducing its dependence on the volatile feature films business to concentrate on increasing revenue from licensing its original content to media houses and video streaming companies such as Netflix Inc and Verizon Communications Inc's Go90.
Revenue from its high-margin television series and specials business more than doubled to US$104.9 million in the fourth quarter ended Dec 31, as the company delivered more episodes under its episodic content licensing arrangements.
The company last month expanded its deal with Netflix to include streaming rights for newer animated series such as "Trollhunters", where a group of students investigate a series of mysterious bear killings.
"DreamWorks has contractual commitments for over 1,600 episodes of original animated TV content across linear and SVOD (subscription video on demand) platforms in more than 130 countries around the globe," Chief Executive Jeffrey Katzenberg said on a conference call with analysts.
The company said it expects television segment revenue to be US$275 million-US$300 million in 2016, higher than the US$228.1 million in 2015.
DreamWorks is betting on fewer movies with stronger plots as well as sequels to fend off stiff competition from Comcast Corp's Universal Pictures and Time Warner Inc's Warner Bros.
The company said last year that it would produce two feature films per year, instead of three, starting 2016.
Revenue from its feature film business rose 11.5 per cent to US$146.4 million in the three months ended Dec 31, helped by"Home" worldwide television release and continuing DVD sales. "Kung Fu Panda 3" - the latest in the studio's "Kung Fu Panda" franchise - has grossed US$118 million at the US box office since its release on Jan 29.
The film has also generated more than US$144 million at the Chinese box office, the company said on the call.
Net income attributable to DreamWorks was US$42.1 million, or 48 cents per share, in the quarter, compared with a loss of US$263.2 million, or US$3.08 per share, a year earlier.
Excluding items, the company earned 55 cents per share, racing past the average analyst expectation of 16 cents.
Revenue surged 36.3 per cent to US$319.3 million, above estimates of US$274 million, according to Thomson Reuters I/B/E/S.