DreamWorks Animation Manages a Quarterly Profit


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Jeffrey Katzenberg, chief executive of DreamWorks Animation, with characters from the “Madagascar” movies in 2012.

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Paul Sakuma/Associated Press

LOS ANGELES — This is why DreamWorks Animation needed to take shelter in the arms of a larger conglomerate: The boutique studio’s “Kung Fu Panda 3” collected about $430 million at the global box office in the last quarter, but the company could put together only $13.8 million in profit, even with help from its television, toy and digital businesses.

DreamWorks Animation’s first-quarter results, released on Thursday, nonetheless were an improvement from the year-ago period, when the company lost $54.8 million.

After years of efforts to escape a boom-and-bust cycle driven by sporadic film releases, Jeffrey Katzenberg, DreamWorks Animation’s chief executive, last week sold his studio to Comcast’s NBCUniversal for $3.8 billion.

The deal, driven by Comcast’s hunger for family-oriented characters to fuel its theme park and licensing divisions, is expected to close by the end of the year; Mr. Katzenberg will ultimately hand over the reins to Christopher Meledandri, NBCUniversal’s animation chief.

“Between now and then, it is business as usual for us,” Mr. Katzenberg said in remarks on a call with analysts. After Fazal Merchant, the chief financial officer, read his own statement, the men abruptly ended the call without taking questions.

Based on Mr. Merchant’s remarks, the expensive “Kung Fu Panda 3” will become the latest in a string of disappointing DreamWorks Animation movie releases.

Mr. Merchant said the film would most likely end its time in theaters at “close to break-even.” Any profitability will depend on future sources of revenue, including DVD sales and television reruns, which Mr. Merchant noted were highly “variable.”

(It has taken in $508 million since release, roughly half of which goes to theater owners; 20th Century Fox, which handles distribution for DreamWorks Animation, also collects a percentage to release and market the film.)

On a brighter note, quarterly revenue totaled $190.4 million, a 14 percent increase from a year earlier, as newer businesses like television cartoon production, consumer products and digital media continued to grow. Analysts had expected revenue of about $183 million.

On a per-share basis, DreamWorks Animation delivered 16 cents in profit for the quarter, far more than analysts had expected.

“I believe our first-quarter results are solid,” Mr. Merchant said.

Profit from the TV unit totaled $21.1 million, an increase from $3.5 million, while consumer products delivered profit of $15 million, up from $9.4 million. Digital media, a unit that includes DreamWorks Animation’s stake in AwesomenessTV, a YouTube-based video company, added $6.5 million in profit, up from $2.1 million.

Still, hit movies are crucial to the DreamWorks Animation business model. The studio will try again with “Trolls,” a musical meant to rekindle the collectible troll crazes of the 1960s and 1990s. Analysts have mixed expectations for the film, which is scheduled to arrive on Nov. 4, the same day that Disney will release Marvel’s “Doctor Strange.”

More established studios in recent days have reported a range of quarterly results for their movie operations.

The blockbuster success of “Deadpool,” which took in $761.3 million worldwide, contributed to $470 million in profit at 21st Century Fox’s film and television studio, a 23 percent year-over-year increase. Operating income at Warner Bros. totaled $426 million, a 29 percent increase, largely because of reduced costs.

Universal Pictures could not match its release last year of “Fifty Shades of Grey,” and operating cash flow declined 43 percent, to $167 million. Bringing up the rear, Paramount, which has been put up for partial sale by Viacom, lost $136 million; analysts had braced for even larger losses.

Disney, which released the smash hit “Zootopia” in the quarter, is scheduled to report its results on Tuesday.

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