Rick Munarriz nailed this one. In a preview of DreamWorks Animation's (NYSE: DWA) latest outing at the domestic box office, Rick theorized that Madagascar might perform on par with the animation company's previous release Shark Tale. According to early estimates at boxofficemojo.com, he was right: Madagascar took in approximately the same amount in its debut Friday-through-Sunday time frame ($47.1 million) as did Shark Tale in its own opening weekend ($47.6 million). Adding in Memorial Day brings the film to an estimated opening total of $61 million.
It was almost a given that Star Wars: Episode III - Revenge of the Sith would remain in the top spot. And the logic that powered Rick's supposition about the first-weekend monetary dynamics was sound. But my gut told me that this was going to be at least a $50 million-plus three-day weekend for the crazy animated animals and their goofy on-screen antics. One issue that affected the film's prospects was Viacom's (NYSE: VIA) Adam Sandler vehicle The Longest Yard. That project performed much stronger than I had anticipated -- it is estimated to have taken in $60 million from Friday through Monday.
I understand the timing, and if I were at DreamWorks Animation, I probably would have voted for a Memorial Day opening as well. However, in hindsight, I wonder whether the company might have been better served by opening the movie this week, say on Wednesday. That would have let a buzz build up leading into the Friday-through-Sunday period, and Sith could have had one more weekend to play out.
As it is, I think Madagascar's equaling Shark Tale in its first three days of release is disappointing. This is the summer, the time when ticket sales are red-hot and everyone is thinking about the three B's: the beach, the barbecue, and the box office. Shark Tale did a great job for a movie opening in October, but someone apparently forgot to tell Madagascar that Halloween isn't around the corner.
Also consider that boxofficemojo.com data indicates that the per-theater-average was slightly less for the current film's opening -- an estimated $11,401, against $11,853 for Shark Tale's debut. What DreamWorks Animation needs right now is great word of mouth to ensure a great second weekend; if it gets that break, and if the weekday grosses stay steady and solid, then the cartoon might reach $200 million, a number more like what investors had in mind for their summer tentpole flick. Jeffrey Katzenberg should rally the marketing troops and send them off to spread the word.
Don't be worried if you're a shareholder, though. Madagascar may not be the next Shrek, but it will still bring in a quality revenue stream over its lifetime, from DVD sales, television placement, merchandise . the usual drill. Motley Fool Stock Advisor pick Pixar (Nasdaq: PIXR) may command a much higher multiple because of its stellar past performance and the expectations for its future library, but I believe DreamWorks Animation's valuation will eventually improve as it continues to develop clever franchises.
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Did you see Madagascar over the weekend? What did you think of it? And what do you think of DreamWorks Animation as a stock investment? Let us know at the company's discussion board.
Fool contributor Steven Mallas owns none of the companies mentioned. The Fool has a disclosure policy.
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