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DreamWorks Animation Posts $24M Profit, Katzenberg Calls DVD ‘Healthy’

DreamWorks Animation SKG reported July 27 a profit of $24 million for the second quarter (ended June 30), down slightly from the same quarter in 2009. The animation giant reported revenue of $158.1 million, driven by strong domestic and international ticket sales for How to Train Your Dragon and Shrek Forever After.

“We have once again surpassed $1 billion in worldwide box office, and with Megamind still to be released on Nov. 5, we are on track to make 2010 not only DreamWorks Animation’s single biggest year at the box office, but also the biggest year ever for any CG animation studio,” said studio CEO Jeffrey Katzenberg.

The success of DreamWorks Animation’s two most recent films should carry over when both are released during the fourth quarter.

“Our fourth quarter is going to be dominated by the How to Train Your Dragon (Oct. 15) and Shrek [Forever After] releases,” said DreamWorks Animation COO Ann Daly during a conference call with investors. She said the two titles should perform especially well since the company is seeing retailers become more selective with what they stock, limiting catalog and TV DVD on store shelves.

“When you look at the DVD marketplace today there’s some stability,” Katzenberg added. “There is a somewhat healthier feeling about DVD at retail today.”

By the end of the second quarter, DreamWorks Animation’s 2009 release Monsters vs. Aliens had sold 7.7 million DVD and Blu-ray Disc units, and contributed $17.2 million in revenue for the quarter. The 2008 releases of Madagascar: Escape 2 Africa and Kung Fu Panda contributed $4.4 million and $2.5 million in revenue for the quarter, respectively. Library titles contributed $48.8 million.

During the call studio officials were asked about the future of 3DTVs.

“The horizons are longer,” Katzenberg said, adding that the real breakthrough for 3DTVs will be years down the line when 3D can be shown without glasses. “You’re looking at a much, much, much greater mass market, and adoption rates [don’t match] with theatrical attendance.

“I think we’ll continue to see a nice ramp-up of deployment [of 3DTVs].”

The studio also announced that it had approved a $150 million share repurchase program. Shares of the studio were up 40 cents to $32.08.