GLENDALE, Calif. (AP) — DreamWorks Animation SKG Inc. said Tuesday that its second-quarter net income fell 63 percent, to a level below analysts' expectations. The company blamed the delayed release of "Madagascar 3: Europe's Most Wanted" in several overseas markets as well as higher distribution costs for some of the miss.
Shares dropped more than 8 percent in after-hours trading.
Net income in the three months ended June 30 was $12.8 million, or 15 cents per share, compared with $34.1 million, or 40 cents per share, a year ago.
Revenue fell 25 percent from a year ago to $162.8 million.
Analysts polled by FactSet, on average, were looking for 25 cents per share of earnings on revenue of $185 million.
Results for the movie studio were driven by the box office receipts from the movie "Madagascar 3." The movie has grossed more than $500 million in theaters worldwide since its June 8 release. That was less than the $600 million grossed by "Kung Fu Panda 2" a year earlier, although that movie benefited from an earlier release in the quarter by a couple weeks.
Not all of the revenue for "Madagascar 3" was recorded before the quarter ended in June, and its distributors took a bigger slice of ticket sales to pay for film prints and advertising than expected, said Chief Financial Officer Lew Coleman.
In addition, the release in major overseas markets such as the U.K., Germany, Austria and New Zealand was being delayed because of the London Olympics. Markets that had released the film, including Russia and China, pay the studio a less-than-average share of ticket sales, which affected revenue, he said.
Coleman said "Madagascar 3" would be a "very profitable film" but blamed timing issues for negatively impacting second-quarter revenue.
Shares of the Glendale, Calif., company fell $1.60, or 8.3 percent, to $17.60 after the report's release. They had closed up 2 cents to $19.20 in regular trading.