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DREAMWORKS ANIMATION’S PROFITS FALL WHILE ITS STOCK RISES

April 28, 2010 by · Leave a Comment 

Despite reporting a 70-percent drop in first-quarter profits on Tuesday, DreamWorks Animation’s stock was up fractionally for the day even in the face of a big slide in the market overall. The studio’s profit drop was explained by the fact that, unlike last year, it had no major home video release during the quarter. DreamWorks Animation reported a profit of $21.7 million, versus $62.3 million a year ago. That topped analysts’ expectations, however. During a conference call, studio chief Jeffrey Katzenberg said that he expected premiums for 3D movies — all future DreamWorks movies are due to be released in 3D — will boost ticket prices by an average of $5.00. “We continue to see strong pricing for the 3-D premium and strong consumer support for it,” Katzenberg said. “Those prices have continued to go up and we think that that will continue.” He also voiced concern about the current practice of converting 2D movies to 3D. “Consumers are savvy. These movies are offered competitively, literally next door to each other.”