Jack Black Sinks DreamWorks Animation

Jack Black is a genius.

"Each year I do one DreamWorks project, then I take all the money to the Oscars and bet it on Pixar," he quipped as a presenter during Sunday night's Academy Awards show.

Sure enough, Disney (NYSE: DIS  ) went on to win the hardware with Wall-E receiving the nod for best full-length animated feature.

However, did you know that Black was also a great stock picker?

After all, just two days after Black's comments, DreamWorks Animation's (NYSE: DWA  ) amazing run of topping Wall Street expectations for 12 consecutive quarters is toast.

The studio's fourth-quarter revenue fell by 31% to $199.8 million. Net income took a 45% hit to $51.6 million, or $0.58 a share. It could have been worse on the bottom line, since DreamWorks Animation scored a $0.12-a-share tax benefit during the period.

Analysts were already braced for a dip, but they were expecting a profit of $0.60 a share on $232.5 million in revenue.

Black's starring role in Kung Fu Panda wasn't enough. The summer blockbuster hit the retail DVD market during the holiday quarter, moving 11.2 million units. Brisk sales helped Kung Fu Panda account for more than half of the company's revenue for the quarter. 

Film studios like Disney and Time Warner (NYSE: TWX  ) have been struggling with DVD sales lately, so 11.2 million copies is pretty good.

As a DreamWorks Animation investor myself, I'm saddened to see the company finally come up short, but I still like what I see in the company. When you earn $51.6 million on $199.8 million in revenue, that translates into juicy net profit margins of 25.8%. That's not too shabby in a supposedly soft quarter.

The company's next release -- Monsters vs. Aliens -- hits multiplexes and IMAX (Nasdaq: IMAX  ) theaters next month.

The studio's ability to milk additional revenue by licensing its characters to everything from Activision Blizzard (Nasdaq: ATVI  ) video games to Build-A-Bear Workshop (NYSE: BBW  ) stuffed animals is also commendable.

So I'll boo and hiss with the disappointed audience this time. I just hope a new winning streak is birthed in three months. Maybe then we'll all be back in Black.

Here are a few panda games to play:

Walt Disney is a Motley Fool Inside Value pick. IMAX is a Motley Fool Rule Breakers recommendation. DreamWorks Animation, Walt Disney, and Activision Blizzard are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz is a sucker for quality animation. Yes, he owns shares of DreamWorks Animation and Disney. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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