‘Flushed’ Hurts DreamWorks Q4 Profits

Hurt by the poor box office of “Flushed Away,” DreamWorks Animation SKG Inc. reported a net loss of $21.3 million for the fourth quarter, the company announced. Based on the film’s performance to date and the current expectations of future performance, Glendale-based DreamWorks Animation recorded a pre-tax charge of $109 million, resulting in a $0.80 reduction to earnings per share on a fully diluted basis for the fourth quarter and the full year of 2006. “Flushed Away,” made in conjunction with Aardman Animation Ltd., was the blot on an otherwise strong year for the studio in both theaters and in home entertainment. In January, DreamWorks announced it severed its partnership with Aardman. The studios collaborated on the 2005 Academy Award winner for best animated features, “Wallace & Gromit: The Curse of the Were-Rabbit.” “Looking at our 2006 releases overall, ‘Over the Hedge’ finished as one of the top performing domestic theatrical releases of the year and is performing well in home video,” DreamWorks Animation CEO Jeffrey Katzenberg, said in a statement. For the quarter ending Dec. 31, DreamWorks reported a net loss of $21.3 million, or a loss of $0.20 per diluted share, on revenues of $204 million. That is a significant change from the net profit of $63 million, or $0.61 per diluted share, on revenues of $172.9 million reported for the same quarter in 2005. For the full year, the company realized a net income of $15.1 million, or $0.15 per diluted share, on revenues of $394.5 million. That is an 85 percent decrease from the net income of $104.6 million, or $1.01 per diluted share, on revenues of $462.3 million for 2005. DreamWorks anticipates 2007 results to be driven by the May release of “Shrek the Third.”