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DreamWorks Posts Higher Loss

DreamWorks Animation SKG Inc. reported a wider first-quarter loss on Thursday due to restructuring charges as it continues to downsize. The Glendale animation studio posted a net loss of $54.8 million (-64 cents a share) for the quarter ended March 31, compared with a net loss of $43 million (-51 cents) in the same period a year earlier. Revenue increased 13 percent to $167.5 million. Analysts on average expected a net loss of 45 cents on revenue of $164.5 million, according to Thomson Financial Network. The loss was reduced to 25 cents a share after adjustments for taxes and a restructuring plan that includes layoffs and shutting down its northern California studio. Chief Executive Jeffrey Katzenberg said this year would be transitional for the company, but he noted the $300 million in global box office for its spring release “Home” was “evidence that the changes we’re making in the core feature animation business are working.” In January, the studio announced drastic changes to its primary business, cutting its annual film output from three to two films, closing its Redwood City facility, laying off up to 500 employees and selling off and leasing back its Glendale campus. DreamWorks Animation has suffered financially after taking $215 million in write-downs on four films over the last two years, including “Turbo” and “Rise of the Guardians.” “Home,” released four days before the end of the first quarter, appears to be reversing that pattern. DreamWorks anticipates that the global revenues will allow 20th Century Fox to recoup marketing and distribution costs, with DreamWorks receiving revenue during the second quarter. The one other recent breakout hit from the studio was “How to Train Your Dragon 2,” which was released in June and has generated more than $600 million in worldwide ticket sales. Shares closed down 61 cents, or about 2 percent, to $26.06 on the Nasdaq.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.
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