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DreamWorks Animation SKG Whiffs on Revenues

DreamWorks Animation SKG (Nasdaq: 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.

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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 of Motley 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.

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