DreamWorks Animation SKG Whiffs on Revenues

Seth Jayson, The Motley Fool
Updated

DreamWorks Animation SKG (NAS: DWA) reported earnings on July 31. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended June 30 (Q2), DreamWorks Animation SKG whiffed on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue dropped significantly and GAAP earnings per share contracted significantly.


Margins shrank across the board.

Revenue details
 DreamWorks Animation SKG reported revenue of $162.8 million. The nine analysts polled by S&P Capital IQ hoped for a top line of $188.7 million on the same basis. GAAP reported sales were 25% lower than the prior-year quarter's $218.3 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $0.15. The nine earnings estimates compiled by S&P Capital IQ averaged $0.25 per share. GAAP EPS of $0.15 for Q2 were 63% lower than the prior-year quarter's $0.40 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 29.8%, 550 basis points worse than the prior-year quarter. Operating margin was 10.1%, 1,150 basis points worse than the prior-year quarter. Net margin was 7.8%, 780 basis points worse than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $137.2 million. On the bottom line, the average EPS estimate is $0.19.

Next year's average estimate for revenue is $692.5 million. The average EPS estimate is $0.94.

Investor sentiment
 The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,117 members out of 1,186 rating the stock outperform, and 69 members rating it underperform. Among 295 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 281 give DreamWorks Animation SKG a green thumbs-up, and 14 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on DreamWorks Animation SKG is hold, with an average price target of $17.59.

Over the decades, small-cap stocks, like DreamWorks Animation SKG have provided market-beating returns, provided they're value priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.

The article DreamWorks Animation SKG Whiffs on Revenues originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend DreamWorks Animation. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement