Dreamworks Animation: Q4 and Yr End Earnings

DreamWorks Animation SKG (NYSE: DWA), announced a Q4 net loss of $21.3m (20 cents a share) compared to positive income of $63.2m (61 cents) in the prior year.  Sales were up 18% to $204m.  The loss was less than the average analyst expectation.
For the full year profit was down 86% to just $15.1m from $104.6m in 2005. 

In an ironic decision, given the title of the movie involved, the company lowered the value of its Flushed Away production by $109m after the movie’s British style humor failed to woo US audiences in theaters.  As a result of the failure, and past write-downs for Chicken Run (2000) and Wallace & Gromit (2005), which came from the same partnership, DreamWorks ended its partnership with UK based Aardman Animation Ltd.

With production costs on animated features exceeding $100m on average, plus marketing expenses upwards of $125m write-downs for under performing features can be a large drag on earnings. The release of Shrek 3 in May and Bee Movie later in 2007 are expected to provided upside.

With the release of earnings, DreamWorks Animation also announced a $150m stock buyback.  Paul Allen, of Microsoft fame, remains the company’s largest shareholder with approximately 21m shares, an amount equal to roughly 25% of the equity.

More detailed press coverage of DreamWorks Animation’s finances can be found at:

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Blockbuster Q4 Earnings

Blockbuster  (NYSE: BBI, BBI.B), reported Q4 earnings.

For the quarter, net income was down to $12.9m ($.05/share) from $18m ($.09/share).  Revenues increased 1.4% to $1.51b.  Online subscribers increased by 700k during the period.  Operating income totaled 445.8m, down from $57m in the prior year.

For the full year, 2006 revenues decreased 3.5% $5.52 billion – attributed by the company to the closing of stores.  Operating income for the year was at $79.1m,  versus a loss of $388m in the prior year (which included a $341m non-cash charge).

More detailed press coverage on Blockbuster’s finances can be found at:

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Marvel (MVL) Q4 Earnings

Marvel (NYSE: MVL) , owner publisher and licensor of the Marvel comic book character library, report weak Q4 earnings.  

Net income was down 14c a share to $11.7m from $25.9m the prior year.  Toy and publishing segments were up, but the licensing division was a drag on earnings.  4th quarter net sales were only $25.5m down from $81.7m last year.  Among that decrease, Marvel’s joint venture with Sony for the Spider-Man franchise provided sales of only $600k off of $4.3m in the prior.  As a positive note, however, the May release of Spiderman 3 should bring positive results in the coming quarters.

Also of interest, Marvel has secured $500m in financing to build their own internal film unit which will allow them to release movies without the revenue share needed in a joint venture.  This both increases the company’s risk exposure but also its potential revenue upside.  Iron Man and Hulk 2 are due to be the first tiles for release from this in house studio with likely targets set for summer/winter 2008.

More detailed press coverage on Marvel’s finances can be found at:

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Tribune Period 1 earnings

Tribune Co (NYSE: TRB), reported its summary of revenues and advertising revenue for its so-called Period 1 ended Feb 4. 

Publishing Revenues were down 6% in January tp $345m.  Circulation revenues were down 5.2%. Advertising revenues were down 7.3%.  Consolidated revenues were down 5% from last years $465m. 

In the broadcast and entertainment division revenues in January were down 1.4% off $98m last year.

The company continues to work through its defined “Self Help” plan.  Some properties are being divesting and there are regular rumors and discussions about larger scale changes including strategic investment or buyout.

More detailed press coverage on TRB’s finances can be found at:

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Getty Images adds Celeb Archive

Getty Images, one of the dominant companies in the Stock Photo industry, and a company comfortable with growth via acquisition, announced it would acquire the holdings of MediaVast, Inc (the parent of photoservice Wireimage) for approximately $200m in cash. The deal will give Getty an increased archive of celebrity photos and video to add to its already vast library of images and video, including the royalty-free istockphoto.com that it acquired in 2006. (Wireimage owns the largest entertainment photo and video archive in the industry).

Wireimage will retain its photographers, executive staff and name. Wireimage and all of Mediavast’s other assets, which also include the Film Magic and Contour Photos business lines, will be incorporated in the editorial division of Getty’s business which focuses on providing images for new services.

The deal will likely close in the next two months but may draw some antitrust regulatory oversight or review before being completed.

Google’s Advertising Buffet

Google the Gatekeeper?  Is Google trying to become the defacto middle-man for advertising placement across both new and traditional media?  Will a prospective company be able to go to Google a year from now and order advertising placement as if at a buffet: “give me 2 radio spots, 1 tv hit, and a ¼ page in these three papers alongside these keywords and this text placement?”


The answers are probably no, but with increasing efforts to participate in placement of tradition media advertising – including in radio (through acquisition of dMarc), print (partnerships with newspapers), and television – alongside its dominant Internet search advertising services, these seem questions worth asking.  It’s almost impossible not to speculate about them.

Today, adding fuel to that kind speculation, Google announced the acquisition of Adscape Media, a small one year old startup that was focusing on providing advertising for the video game industry (termed “in-game” advertising).

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Lionsgate Q3 Earnings

Lionsgate (NYSE: LGF), the maker/distributor of television, movie and music content including popular programming like Showtime’s Weeds, announced results of Q3 on Tuesday (year end results due in early April) .  

For the quarter ended Dec 31, 2006, revenues were up 11% to $254.5m.  Operating income was up 270%.  International revnue was up 90%.  Home movie and theatrical operations saw single digit revenue declines but free cash flow increased by well over 100% to $50.7m

Sequels do out later in the year to its Saw and Hostel movie franchises are expected to provide solid growth for the company.  Rumors of the company being a potential acquisition target are encouraged by their positive growth.

More detailed press coverage on Lionsgate’s finances can be found at:

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