If a movie studio reports a quarter in which it didn't release any new movies, does it make a sound?
I guess it does. When DreamWorks Animation SKG
The main driver of DreamWorks' $108 million in sales was the DVD release of "Megamind" and continued home entertainment sales of "Shrek Forever After." The quarter looked terrible in a year-over-year perspective primarily due to the fifth-largest contributor: "How to Train Your Dragon" was box-office gold in the year-ago quarter but only pulled in $8.7 million of DVD revenue this time around. Solid catalog titles "Madagascar 2" and "Kung Fu Panda" outdid "Dragon," partly through DVD sales but also with international and domestic TV syndication.
Ho-hum -- right? Wrong.
That breadth of high-value franchises bodes well for DreamWorks' future. "Kung Fu Panda 2" hits theaters in the next quarter and should be a guaranteed hit, sight unseen. Yes, it's published in revenue-boosting 3-D formats. Shrek and Toothless, the dragon, are moving into the TV-release window. The remains of 2011 are shaping up to a respectable showing.
Eager to boost its off-screen business, DreamWorks also announced a licensing agreement with resort operator Gaylord Entertainment
That deal gives Gaylord a character-driven appeal like the Walt Disney
You can certainly pick worse role models than the House of Mouse if you're aiming for long-term success. DreamWorks is already the next best thing to Pixar when it comes to making hit-worthy animated features, so why not go whole hog (or panda) with the entire Disney concept? It all starts with creative content, and the rest is just common-sense business.
So yeah, DreamWorks is making plenty of noise -- just not in the form of hugely impressive single-quarter results.
How far can DreamWorks follow in Disney's footprints? I think the company will go far, and the 37% price drop over the last year represents a buying opportunity more than anything else. Add DreamWorks Animation SKG to your Foolish watchlist, and we'll keep you informed.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. Walt Disney and DreamWorks Animation SKG are Motley Fool Stock Advisor picks. 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. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.