NEW YORK (AP) -- Shares of DreamWorks Animation rose Wednesday, a day after the animation studio said that it expects its revenue from TV shows to double.
THE SPARK: DreamWorks said in a conference call with analysts late Tuesday that it expects TV show revenue to reach $200 million by 2015 after announcing two new TV deals this week.
THE BIG PICTURE: On Monday, DreamWorks said it would supply 300 hours of new shows to online video streaming company Netflix Inc. for several years starting in 2014. On Tuesday, it announced a similar deal with Super RTL, a German television station.
DreamWorks, which has released animated movies such as "Shrek," ''Kung Fu Panda" and "Madagascar," said the shows will be based on its past or future hits.
The revenue from the TV deals will help the company be less dependent on the success of the two or three movies that it releases every year.
THE ANALYSIS: Because of the new TV deals, Sterne Agee analyst Vasily Karasyov adjusted his earnings estimates for DreamWorks and raised the stock's price target to $21.50 from $18.
Sterne Agee now expects the company to post earnings of $1.15 a share, down from $1.18 for fiscal year 2013, citing increased expenses, but raised its earnings estimate to 84 cents per share from an earlier estimate of 77 cents per share for fiscal year 2014. It raised its earnings estimate for fiscal year 2015, to 90 cents per share from 74 cents per share.
SHARE ACTION: DreamWorks Animation SKG Inc. shares rose 74 cents, or 3 percent, to $25.05 in midday trading after briefly reaching $25.50, matching a 52-week high it touched on Monday.
As of Tuesday's closing price, its shares have risen over 6.5 percent this week.