DreamWorks Animation SKG Inc.’s (DWA) highly anticipated release, Penguins of Madagascar, garnered roughly $36 million in the U.S. over five days of the opening weekend, falling considerably short of analysts’ expectation of $47 million.
Meanwhile, analysts had been betting on the movie’s success taking into account the approaching holiday season along with the popularity of the Madagascar movie franchisee.
Notably, the animated movie hit the theaters last weekend across 3,764 domestic cinemas. The movie has also hit select IMAX Corp. (IMAX) theaters across Europe, Asia, the Middle East and Latin America
Despite managing the second spot after The Hunger Games: Mockingjay – Part 1 with $57 million weekend collections, DreamWorks’ Penguins of Madagascar is facing intense competition from The Walt Disney Company’s (DIS) Big Hero 6 and Christopher Nolan’s, Interstellar.
All three movies have garnered attractive figures, capitalizing on the U.S. festive season. Meanwhile, DreamWorks’ latest movie is expected to disappoint further with the upcoming release of the Peter Jackson flick The Hobbit: The Battle of the Five Armies, slated to release on Dec 17.
DreamWorks’ top-line growth is highly dependent on the company’s Feature Film business, which accounts for nearly 75% of the total revenue. Hence, lower number of movie releases in a year (average three movies per year) coupled with uncertainties shrouding the movie business continue to pressurize revenues. Thus, we believe that DreamWorks is considering a complete sale of its business to leading U.S. toy maker – Hasbro Inc. (HAS).
On the bright side, Penguins of Madagascar has already collected nearly $98.6 million worldwide in the opening weekend as against its $132 million budget, inclusive of production and distribution costs. Moreover, the flick received a strong 7.3 rating on IMDB.
Even, its earlier release – How to Train your Dragon 2 – made a soft debut at the box-office with $43 million in the opening weekend. However, the movie picked up and generated an astounding $618 million in 2014. Earlier three releases of its Madagascar franchisee have produced overall $1.9 billion box-office revenues with an average of $628 million per movie.
Animated movies have done fairly well so far in 2014 as both Rio 2 and The Lego Movie featured among the top 20 highest grossing movies of the year, generating over $450 million each. Based on these positives, we believe that Penguins of Madagascar will certainly gain momentum moving into the holiday season.
DreamWorks currently has a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment