DreamWorks Animation (DWA) Posts Earnings in Q1

DreamWorks Animation SKG Inc. DWA posted strong financial results in the first quarter of 2016 wherein both the top and the bottom line surpassed the Zacks Consensus Estimate.

DreamWorks reported net income of $13.8 million or 16 cents per share as against a net loss of $54.8 million or 64 cents in the prior-year quarter. However, adjusted earnings of 16 cents compared favorably with the Zacks Consensus Estimate of a loss of 1 cent.

Quarterly revenues climbed 14.4% year over year to $190.4 million and also surpassed the Zacks Consensus Estimate of $174 million. Operating income amounted to $13.8 million in the first quarter against an operating loss of $35.3 million.

Segment-wise, Feature Film revenues edged down 26.7% year over year to $94.3 million. Revenues from the Television Series and Specials unit totaled $57 million, up a substantial 211% from the last-year quarter; while Consumer Products revenues increased 49.7% to $21.4 million. The New Media segment reported revenues of $15.2 million in the first quarter, up 230% year over year while Other segment contributed 2.5 million to revenues compared with $0.8 million in the prior-year quarter.

At the end of the quarter under review, the company had $91.6 million of cash and cash equivalents and no outstanding debt compared with $110.8 million of cash and cash equivalents and no outstanding debt at the end of 2015.

Operating cash flow consumption at the end of the first quarter of 2016 totaled $52.9 million compared with cash flow generation of $1.6 million at the end of the same period in 2015. Free cash flow consumption in the reported quarter totaled $49.2 million compared with $0.2 million at 2015-end.
 
Zacks Rank & Stocks to Consider

DreamWorks presently carries a Zacks Rank #3 (Hold). Better-ranked stocks in a related sector are IMAX Corporation IMAX, World Wrestling Entertainment Inc. WWE and MSG Networks Inc. MSGN. IMAX sports a Zacks Rank #1 (Strong Buy) while the other two companies carry a Zacks Rank #2 (Buy).

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