The numbers: Not good. Dreamworks Animation posted a net loss of $15.39 million last quarter, compared to net income of $22.25 million a year earlier. Revenues were $122.28 million for the quarter, down 42.7%. Shares fell about 9% in after-hours trading.
The takeaway: DreamWorks Animation still makes most of its revenue on movies, but those dollars are coming mostly from home entertainment and pay TV rather than from theaters. Of the theater releases, the March film Mr. Peabody and Sherman contributed only $1.5 million to Q2 revenue, while How to Train Your Dragon 2, released last month, contributed $2.6 million in the quarter. How to Train Your Dragons 2 will be released in China and other foreign markets next month, and that is expected to contribute to revenues down the line. Most of the quarter’s film revenue came from library titles and the international pay TV popularity of The Croods, which was released in theaters last year.
What’s interesting: The company is continuing to accelerate its expansion into TV. Tuesday’s earnings come a day after DreamWorks Animation announced former Disney executive Mark Zoradi, who was responsible for Walt Disney Home Entertainment and brings years of TV experience to the executive level, as COO. The TV segment contributed $20.0 million in revenue last quarter, partly from Turbo F.A.S.T. on Netflix and DreamWorks Dragons: Riders of Berk on Cartoon Network. DreamWorksTV launched last month as the YouTube arm of DreamWorks Animation, with both live action and animated original content aimed at children. Some videos revive characters that already have a strong fan base—the Shrek characters have become vloggers—while others are new, younger takes on reality shows, like I Pranked My Parents! With its recent executive hires, the acquisition of AwesomenessTV last year, and the YouTube launch last month, Dreamworks is trying to build “a television division committed to more than 1100 episodes of original programming.”