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Studio has inconsistent quarter

DreamWorks plans to more carefully time the release of animated movies in the future.

February 24, 2011|By Bill Kisliuk, bill.kisliuk@latimes.com

Glendale-based DreamWorks Animation on Thursday reported strong fourth-quarter earnings, despite what Chief Executive Jeffrey Katzenberg admitted was an “up-and-down” performance for the studio.

DreamWorks revenues rose to $275.7 million, compared with $194 million in the same period a year earlier. Profits for the quarter came in at $85.2 million, nearly double the $43.6 million in the same quarter in 2009.

The strong performance was led by home video sales for “How to Train Your Dragon,” which was also in theatrical release.

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But the company failed to meet investor expectations, in part because of higher costs, disappointing results for the film “Megamind” and unprofitable ventures such as “Shrek: The Musical” and the online Kung Fu Panda virtual world.

“Megamind” grossed $320 million in the theaters at a time when blockbusters gross twice as much.

The movie is scheduled for release on home video today.

“With a successful home video release, we do expect ‘Megamind’ to be profitable,” Katzenberg said.

He expressed confidence that computer-generated animation and 3-D films will continue to be vital to the movie market. With a $5-million investment in 3-D movies last year, Katzenberg said the studio realized incremental revenue of $100 million from higher ticket prices.

But he also said the studio will more carefully time the release of animated films in an increasingly competitive market.

“More than ever we are determined to have each film have the adequate time to realize its potential,” Katzenberg said.

He said the industry slide in home video sales, spurred largely by the success of Netflix, remains a conundrum for DreamWorks and otherstudios.

“Every three to four to five months, it is a different equation for us and everyone else,” Katzenberg said.

The studio’s next big release, “Kung Fu Panda 2,” is slated for May.

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