Please ensure Javascript is enabled for purposes of website accessibility

DreamWorks Animation SKG Catches Analysts Sleeping Again

By Seth Jayson – Updated Apr 10, 2017 at 1:33PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Just the facts, Fool.

DreamWorks Animation SKG (Nasdaq: DWA) reported earnings on April 30. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), DreamWorks Animation SKG crushed expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped slightly. GAAP earnings per share dropped significantly.

Gross margins grew, operating margins dropped, net margins contracted.

Revenue details
DreamWorks Animation SKG logged revenue of $134.6 million. The nine analysts polled by S&P Capital IQ foresaw net sales of $96.0 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

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 $0.07. The eight earnings estimates compiled by S&P Capital IQ averaged -$0.01 per share. GAAP EPS of $0.07 for Q1 were 36% lower than the prior-year quarter's $0.11 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 36.5%, 740 basis points better than the prior-year quarter. Operating margin was 4.0%, 410 basis points worse than the prior-year quarter. Net margin was 4.1%, 260 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $165.8 million. On the bottom line, the average EPS estimate is $0.11.

Next year's average estimate for revenue is $694.2 million. The average EPS estimate is $0.80.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,107 members out of 1,183 rating the stock outperform, and 76 members rating it underperform. Among 337 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 322 give DreamWorks Animation SKG a green thumbs-up, and 15 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 $16.22.

Is DreamWorks Animation SKG the right retailer for your portfolio? Learn how to maximize your investment income and ""Secure Your Future With 9 Rock-Solid Dividend Stocks,"" including one above-average retailing powerhouse. Click here for instant access to this free report.

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 recommends DreamWorks Animation. 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.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.