Seeking Alpha

Dreamworks Animation SKG Inc (DWA)

  • Thu, Mar. 12, 11:57 PM
    • The MPAA's report on global box office notes that 2014 sales were up 1% to $36.4B, lifted by China's industry -- the first time that Asian revenues passed those of other regions.
    • China's $4.8B made it the first foreign market to exceed $4B a year. Domestic sales of $10.4B were down 5%.
    • In 2013 the three major regions (North America, Europe/Middle East/Africa, Asia Pacific) essentially tied, but 2014 was the year of Asian box office share: 34.1% vs. 29.1% in EMEA and 28.6% in North America.
    • Among worries for the industry, The Hollywood Reporter notes 32% of North America's audience didn't go to a movie at all, and that steep dropoffs in ages 2-11 and 25-39 means the industry needs to look at long-term audience growth. (Frequent moviegoers make up just 11% of the population but buy 51% of the tix.)
    • The U.S. industry might be frontloaded for a rebound with a franchise- and sequel-heavy 2015 ahead, though.
    • Filmmakers: CMCSA, FOXA, TWX, VIA, DIS, DWA, SNE
    • Previously: DreamWorks touts Chinese venture, global projects (Mar. 04 2015)
    | Thu, Mar. 12, 11:57 PM | 1 Comment
  • Wed, Mar. 11, 7:59 PM
    | Wed, Mar. 11, 7:59 PM | Comment!
  • Wed, Mar. 11, 12:51 PM
    • DreamWorks Animation (NASDAQ:DWA) is up 2.3% as Verizon (NYSE:VZ) seals a deal to add 200 hours of original video content to its upcoming video service from DWA's AwesomenessTV and DreamWorksTV, targeting teens and young millennials with over-the-top video.
    • The programming will include scripted and unscripted series as well as DreamWorks original characters.
    • AwesomenessTV, acquired by DreamWorks in 2013, features 7B views and 112M subscribers.
    • The deal will take some pressure off what some, like BTIG's Richard Greenfield, see as a heavy dependence on Netflix.
    | Wed, Mar. 11, 12:51 PM | Comment!
  • Wed, Mar. 4, 8:45 PM
    • DreamWorks Animation's (NASDAQ:DWA) Chinese joint venture is "incredibly important" to the troubled company, CFO Fazal Merchant said today as attention turns from a rough Q4 to the next two years for the studio.
    • Thanks to co-founder Jeffrey Katzenberg's frequent visits to China, they're in a "blessed place" with Oriental DreamWorks, the partnership the studio formed with China Media Capital, Shanghai Media Group and Shanghai Alliance Investment to create family-friendly content.
    • The venture's first project, Kung Fu Panda 3, is due in 2016. The first two films in the Kung Fu Panda series drew worldwide grosses of $632M and $665M respectively, off production budgets of $130M-$150M.
    • Merchant was speaking at Morgan Stanley's Technology, Media & Telecom Conference and also proclaimed Netflix (NASDAQ:NFLX) "incredibly pleased" with their deal through 2017 (a good thing if DWA is as dependent on the streamer as rumored). "If there were issues, I don't think they'd be shy about telling us."
    • Shares finished the day up 5.7%.
    • Earlier: DreamWorks up 7.7%, on two-day surge as planning takes shape (Mar. 04 2015)
    • Previously: DreamWorks rallies -- but too dependent on Netflix? (Feb. 25 2015)
    • Previously: DreamWorks pummeled after brutal quarter; rough year ahead (Feb. 24 2015)
    | Wed, Mar. 4, 8:45 PM | Comment!
  • Wed, Mar. 4, 3:20 PM
    • DreamWorks Animation (NASDAQ:DWA) is surging toward the close, up 7.7% now (and +10.9% since Monday).
    • The stock's been swimming in bad news after an awful quarter, but investors may be beginning to listen to chief Jeffrey Katzenberg, who says he's re-focusing on the core film business after some distractions in TV, consumer products and digital.
    • He expects the company to break even this year, however. The way forward for the company's divisions is varied and all depends on some extent to making hit movies again.
    • In that case, Cowen's Doug Creutz is still skeptical: "In the near-term, we think the trailers for Home are among the least appealing we have seen from the company," he says, adding most long-term changes won't hit until 2016 or later. Home, coming out this month, is DWA's only scheduled release for 2015.
    • Previously: DreamWorks to sell campus HQ to SunTrust unit (Feb. 26 2015)
    • Previously: DreamWorks pummeled after brutal quarter; rough year ahead (Feb. 24 2015)
    | Wed, Mar. 4, 3:20 PM | Comment!
  • Thu, Feb. 26, 8:37 PM
    | Thu, Feb. 26, 8:37 PM | 1 Comment
  • Wed, Feb. 25, 7:11 PM
    • Despite an after-hours selloff Tuesday on a tough Q4 report, DreamWorks Animation (NASDAQ:DWA) ended today up 5.9% on more than double average volume.
    • Is it possible the worst is behind the studio? The company addressed short-term liquidity issues, using their call to detail its increased revolver and the $185M sale of its headquarters, and the reshuffled leadership is giving some hope to those expecting a refocus on core creative work.
    • There are still key challenges ahead even if restructuring goes well: Aside from the one release coming this year, BTIG's Richard Greenfield notes the firm may be way too dependent on Netflix -- "the only thing keeping DreamWorks solvent."
    • "DreamWorks filed an 8-K this morning revising their answer to our question admitting that Netflix represented nearly 15% of DreamWorks’ revenues in 2014, which equates to $102M ... Given the increased cadence of television series DreamWorks Animation will deliver to Netflix in 2015, it is not hard to imagine Netflix’s share of DreamWorks’s revenues rising" materially above that.
    • Complicating matters, Greenfield thinks the quality of content that DWA is sending Netflix is poor.
    | Wed, Feb. 25, 7:11 PM | 4 Comments
  • Tue, Feb. 24, 8:39 PM
    • On its Q4 earnings call, DreamWorks Animation (NASDAQ:DWA) filled in some details on a tough quarter -- one which saw them lose almost a quarter of a million dollars, pre-announce a heavy writedown on The Penguins of Madagascar and two unreleased projects, prepare layoffs of 500 workers, and cut its film production schedule to two films a year instead of three.
    • Shares were down 8.7% in late trading.
    • Though the plans are to make two movies a year, the studio has just one slated for the "transitional year" of 2015: alien-relocation comedy Home, and it comes out March 27. It's budgeted in the $135M range, while the studio is generally aiming for $120M budgets.
    • CEO Jeffrey Katzenberg reshuffled execs, tapping veteran producers Bonnie Arnold and Mireille Soria to lead feature animation, and will take the opportunity to get personally re-engaged with the creative side of the company: "Returning to a much much more active participating role ... has been the silver lining for me" after "without a question, the hardest, most difficult, most painful eight weeks in our 20-year history."
    • Saying it's better to get liquidity when you don't need it, the company increased its revolving credit facility to $450M from $400M and extended its term to February 2020.
    • The studio also is selling its Glendale headquarters and will enter into a leaseback arrangement for $185M.
    • Previously: DreamWorks still lower in wake of heavy layoffs (Jan. 28 2015)
    • Previously: DreamWorks Animation confirms layoffs (Jan. 23 2015)
    | Tue, Feb. 24, 8:39 PM | 3 Comments
  • Tue, Feb. 24, 5:39 PM
    • Top gainers, as of 5:15 p.m.: BNFT +30.0%. RUBI +13.2%. ZAGG +9.9%. NKTR +9.4%. FLTX +7.4%.
    • Top losers, as of 5:15 p.m.: SLCA -11.7%. LC -10.7%. DWA -9.1%. SAM -8.0%. HPQ -6.5%.
    | Tue, Feb. 24, 5:39 PM | 7 Comments
  • Tue, Feb. 24, 4:23 PM
    • DreamWorks Animation SKG (NASDAQ:DWA) missed on Q4 revenues and earnings expectations, even with advance writedowns on films The Penguins of Madagascar and Mr. Peabody and Sherman.
    • The results also featured the impact of its plans for heavy layoffs; DWA took a $210.1M pre-tax charge associated with restructuring.
    • Revenue breakdown: Feature film segment, $131.3M (How to Train Your Dragon 2 contributes $66M; Turbo, $5.8M; The Croods, $6.5M; library titles, $46.1M; The Penguins of Madagascar and Mr. Peabody and Sherman did not contribute as they hadn't recouped marketing/distribution costs).
    • Television Series and Specials revenue: $50.7M, up 7.7%. Consumer Products, $22.1M, up 77.5%. New Media Segment, $24.9M.
    • Conference call at 4:30 p.m ET.
    • Shares -0.6% after hours.
    • Press release
    | Tue, Feb. 24, 4:23 PM | 2 Comments
  • Tue, Feb. 24, 4:10 PM
    • Dreamworks Animation (NASDAQ:DWA): Q4 EPS of -$0.75 may not be comparable to consensus of -$3.01.
    • Revenue of $234.24M (+14.7% Y/Y) misses by $11.93M.
    • Press Release
    | Tue, Feb. 24, 4:10 PM | Comment!
  • Mon, Feb. 23, 5:35 PM
  • Wed, Jan. 28, 3:39 PM
    • DreamWorks Animation (NASDAQ:DWA) is off 6% -- trading lower for the second day in a row, and down 15.6% since its announcement of layoffs and a smaller film slate.
    • The studio said it would lay off 18% of its workforce and concentrate on just two films a year instead of three (only one film, Home, is set for 2015).
    • In the wake of some box-office disappointments, CEO Jeffrey Katzenberg says it's time for him to focus more on the studio's core filmmaking business.
    • Not all outlooks are grim; along with Piper Jaffray's upgrade, B. Riley has upgraded the stock to Buy, and The Hollywood Reporter notes the studio can draw $250M in credit if needed, along with selling unencumbered assets like its Glendale, Calif., campus for hundreds of millions more.
    • Shares are off 44% in the past year.
    | Wed, Jan. 28, 3:39 PM | Comment!
  • Fri, Jan. 23, 9:11 AM
    | Fri, Jan. 23, 9:11 AM | 3 Comments
  • Fri, Jan. 23, 7:26 AM
    • Cowen Research downgrades DreamWorks Animation (NASDAQ:DWA) to an Underperform rating after revisiting its thesis following the company's downsizing announcement.
    • Upside potential is limited, reasons Cowen.
    • Piper Jaffray takes the other of the trade, upgrading the studio stock to Overweight and assigning a $26 price target.
    • The take from Piper is that future writedowns are unlikely with DreamWorks already throwing in the kitchen sink.
    • Previously: Management shake-up at DreamWorks Animation (Jan. 05 2015)
    • Previously: DreamWorks Animation confirms layoffs (Jan. 23 2015)
    • DWA -1.45% premarket.
    | Fri, Jan. 23, 7:26 AM | Comment!
  • Fri, Jan. 23, 2:15 AM
    • Confirming earlier reports, DreamWorks Animation (NASDAQ:DWA) announces it will cut 500 jobs, about one-fifth of the work force, as part of a plan to restructure its core feature animation business.
    • DWA also says it will lighten its management structure, firing three top executives, and will produce only two feature films a year, instead of three, starting in 2016.
    • The studio expects to incur a pre-tax charge of about $290M in connection with the restructuring.
    • DWA +1% AH
    • Previously: Report: Layoffs on the way at DreamWorks Animation (Jan. 19 2015)
    | Fri, Jan. 23, 2:15 AM | 1 Comment
Company Description
Dreamworks Animation SKG Inc creates and exploits family entertainment, including animated feature films, television series and specials, live entertainment properties and related consumer products.