Jeff Katzenberg: ‘Turbo’ Will Be Profitable
It’s a low bar. But the projection by the DreamWorks Animation CEO in a conference call with analysts should reassure investors who feared that the company would have to record an impairment charge for its summer release about a snail who dreams about competing in the Indy 500. The film, which cost about $127M to produce, has generated about $246.1M from worldwide box offices — far below early expectations. Fox is still recouping its distribution costs. As a result, DreamWorks Animation recognized just $6.4M from the film in Q3 largely from China and South Korea, where Fox is not the distributor. Jeffrey Katzenberg said in July that he expected Turbo to turn a profit, especially in overseas markets where it had yet to open and would face less competition than it did in the U.S. But with DWA’s continuing box office disappointments, Janney Capital Markets’ Tony Wible said last week that the company “may take as much as a $90M impairment on Turbo.” B. Riley analyst David Miller was slightly more optimistic, saying the studio might take a loss of as much as $19M. “Suffice it to say, it’s going to be very close,” he said. Miller last month lowered his global box office estimate for Turbo by 22.6% and cut his 2013 earnings estimate for DWA by 27.1% to 70 cents a share. COO Ann Daly says that revenues will still come in from the November 12 home video release, racing toys sold by Mattel, and the upcoming spinoff series for Netflix called Turbo: F.A.S.T.
Related: Mipcom: Jeffrey Katzenberg Talks DreamWorks Animation TV
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