9:59 p.m. | Updated LOS ANGELES — Charges totaling $165 million, including a hefty write-down related to the underperforming movie “Rise of the Guardians,” prompted DreamWorks Animation to report an $82.7 million loss in the fourth quarter.
The company reported quarterly financial results on Tuesday after the close of trading. The company’s shares dropped 1.25 percent in regular trading, to $16.61, and fell less than 1 percent in after-hours trading.
“Rise of the Guardians,” which was released in November and directed by Peter Ramsey, cost more than $250 million to make and market, but took in less than $303 million at the global box office; that number is split 50-50 with theater owners. The company said on Tuesday that it would take an $87 million write-down for the film.
DreamWorks Animation, which has a remarkably consistent track record of hits, had strong hopes that “Rise of the Guardians” would start a new franchise. But families did not respond to its dark take on some classic childhood characters, like the Easter bunny, and instead it became perhaps the biggest flop in the company’s history.
The company, based in Glendale, Calif., also took fourth-quarter charges of $54 million related to a recent decision to withdraw from its schedule a movie planned for release next year (“Me My Shadow”). As part of its reshuffling of releases, DreamWorks Animation will lay off several hundred of its 2,000 employees.
Jeffrey Katzenberg, the company’s chief executive, mentioned the layoffs in a conference call with analysts on Tuesday. About 350 people will lose their jobs by the end of the year. The plan, he said, is to “meaningfully reduce our overall cost structure.”
For the quarter, DreamWorks Animation reported a loss of $82.7 million, or 98 cents a share, in contrast to a profit of $24.3 million, or 29 cents a share, for the same period a year ago. Revenue was $264.7 million in the recent quarter.
Because of the charges, which also included $20 million related to films in development and $4.6 million in restructuring costs, DreamWorks Animation reported a loss of $36.4 million for the year.
Mr. Katzenberg noted that the company scored big last year with “Madagascar 3: Europe’s Most Wanted,” which took in $746.6 million at the global box office. Still, he said, “One of the new challenges we face is heightened competition for family audiences,” making the perfect release date for films “critically important.”
Article source: http://mediadecoder.blogs.nytimes.com/2013/02/26/dreamworks-reports-82-7-million-loss/?partner=rss&emc=rss