On Oct. 31, DreamWorks Animation (NYSE:DWA) released third-quarter earnings for the period ended Sept. 30.

  • DreamWorks benefited from $6.4 million in net income, or $0.01 per diluted share, from renegotiating a vendor contract with Paramount.

  • Thanks to new opportunities with Paramount and Nickelodeon and favorable market conditions, DreamWorks is shifting away from a direct-to-video strategy.

  • Get the full rundown on DreamWorks' earnings.

(Figures in thousands, except per-share data)

Income Statement Highlights

Avg. Est.

Q3 2006

Q3 2005

Change

Sales

$38,825

$55,584

$87,107

(36.2%)

Net Profit

--

$10,467

($656)

N/A

EPS

($0.02)

$0.10

($0.01)

N/A

Diluted Shares

--

103,432

103,092

0.3%



Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

46.50%

36.22%

10.28

Operating Margin

15.97%

11.05%

4.92

Net Margin

18.83%

(0.75%)

19.58

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$535,967

$433,635

23.6%

Accounts Rec.

$1,424

$8,413

(83.1%)

Inventory

$638,858

$565,787

12.9%



Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$4,175

$7,386

(43.5%)

Long-Term Debt

$118,269

$116,945

1.1%

Learn the ways of the balance sheet.

Cash Flow Highlights

YTD 2006

YTD 2005

Change

Cash From Ops.

$134,555

$401,299

(66.5%)

Capital Expenditures

$1,307

$3,733

(65%)

Free Cash Flow

$133,248

$397,566

(66.5%)



Find out why Fools always follow the money.

Related Companies:

  • Marvel Entertainment (NYSE:MVL)
  • Regal Entertainment (NYSE:RGC)
  • Lions Gate Entertainment (NYSE:LGF)

Related Foolishness:

DreamWorks Animation and Marvel Entertainment are both Motley Fool Stock Advisor recommendations. To gain access to a free Stock Advisor special report, click here.

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