(Reuters) - DreamWorks Animation SKG Inc’s fourth-quarter revenue fell a steeper-than-expected 23 percent due to the continued poor performance of “Turbo” and the lack of a major movie released in the United States in the period.
Shares of the Hollywood studio fell 7.5 percent to $32.55 in extended trading after the company also said it took a charge related to the poor performance of “Turbo.”
“Turbo faced one of the most competitive feature film environments we have seen,” Chief Executive Jeffrey Katzenberg said on a conference call with analysts.
“While it performed fairly well during the fourth quarter at the international box office and its home video release, it still fell short of our expectations.”
“Turbo”, an animated movie about a garden snail that races in NASCAR, had a slow start in the U.S. theaters after its release in July pit it against rival studios’ films such as “Monsters University” and “Despicable Me 2”.
DreamWorks said on Tuesday that it expects its full-year 2014 results to be helped by the release of “Mr. Peabody & Sherman” in March in the United States and “How to Train Your Dragon 2” in June.
The company has released “Mr. Peabody & Sherman” in the UK, France and Argentina to take advantage of the school holidays.
But, the studio does not expect a significant contribution to revenue in the first-quarter from the movie, which is about an animated comedy about a talking genius dog and the boy he adopts.
“Turbo” had a slow start at the U.S. theaters, prompting several analysts to forecast a writedown on the film in the second or the third quarter.
DreamWorks avoided that, but on Tuesday said the movie’s poor performance during the last two months of the fourth quarter ended December 31 forced it to take an impairment charge of $13.5 million, or 12 cents per share.
The company also took an impairment charge of about 6 cents per share related to a short movie, “Rocky and Bullwinkle”.
DreamWorks reported net income of $17.3 million, or 20 cents per share in the fourth quarter, compared with a loss of $82.7 million, or 98 cents per share, a year earlier.
Revenue fell 22.8 percent to $204.3 million.
Excluding the two charges and a gain the company earned 33 cents a share.
Analysts on average had expected earnings of 32 cents per share, on revenue of $223.2 million, according to Thomson Reuters I/B/E/S.
In December, Netflix Inc began streaming “Turbo: F.A.S.T” - DreamWorks’ first animated series for the video streaming service provider.
“We do not expect to deliver additional series beyond “Turbo: F.A.S.T” to Netflix until the fourth Quarter of 2014,” Chief Finacial Officer Lew Coleman said on the call.
Coleman said the company would incur marketing costs related to the series, which follows the snail’s story after its triumphant return from the Indianapolis 500 race.
DreamWorks spent about $135 million to make “Turbo”. The movie has so far grossed about $282.6 million in receipts, according to Box Office Mojo, a website that tracks theater ticket sales.
DreamWorks shares closed at $35.20 on the Nasdaq on Tuesday.
Editing by Savio D'Souza