MUMBAI: DreamWorks Animation SKG, Inc reported a seven per cent drop in both revenue and net income driven by poor overseas ticket sales for its latest film, Monsters vs. Aliens.
The company reported total revenue of $132.0 million and net income of $25.6 million. This compares to revenue of $141.5 million and net income of $27.5 million for the same period in 2008.
"Our solid second quarter results were driven primarily by the continued performance of our 2008 films, Kung Fu Panda and Madagascar: Escape 2 Africa. Our third consecutive hit, Monsters vs. Aliens, has also reached blockbuster status in the US at nearly $200 million. Additionally, we continue to make great progress on a number of our growth initiatives at DreamWorks Animation," said DreamWorks Animation CEO Jeffrey Katzenberg.
Kung Fu Panda, the company’s 2008 summer release, contributed approximately $32.7 million of revenue to the quarter, primarily driven by domestic pay television. Through the end of the second quarter, it reached an estimated 15.2 million home entertainment units sold worldwide, net of actual and estimated future returns.
The company’s fall 2008 release, Madagascar: Escape 2 Africa, contributed $26.1 million of revenue to the quarter, primarily driven by international home entertainment. Through the end of the second quarter, it reached an estimated 10.2 million home entertainment units sold worldwide, net of actual and estimated future returns.
During the second quarter the company amended its video game agreement with Activision, which resulted in a financial impact to the quarter of $24 million of revenue.
Monsters vs. Aliens contributed $10.3 million of revenue to the quarter, primarily as a result of the aforementioned amendment to the company’s video game agreement. Monsters vs. Aliens has grossed approximately $198 million at the domestic box office, bringing its worldwide box office total to over $377 million to date.
Library and other titles contributed $50.8 million of revenue to the quarter, including $10.1 million of revenue from Shrek The Musical as well as continued catalogue home entertainment performance and international free television for feature films.
Costs of revenue for the quarter equaled $74.0 million. Selling, general and administrative expenses totaled $24.8 million (including approximately $8.4 million of stock compensation expense) as compared to $27.0 million (including approximately $8.3 million of stock compensation expense) for the comparable period of 2008.
Looking ahead, the company’s third quarter results are expected to be driven primarily by the home entertainment performance of Monsters vs. Aliens, which will be released on DVD and Blu-ray domestically on 29 September, 2009, as well as Madagascar: Escape 2 Africa’s domestic pay television.