DreamWorks (DWA) Reports Earnings in Q2; Sales Rise Y/Y

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

DreamWorks' second-quarter 2016 earnings of 3 cents per share compared favorably with the year-ago loss of 13 cents and the Zacks Consensus Estimate of a loss of 8 cents.

Quarterly revenues climbed 29.2% year over year to $221 million and also surpassed the Zacks Consensus Estimate of $187 million. Operating income amounted to $9.4 million in the second quarter against an operating loss of $21.8 million.

Operating Results

Segment-wise, Feature Film revenues improved 10.8% year over year to $97.8 million. Revenues from the Television Series and Specials unit totaled $71.8 million, up 31% year over year while Consumer Products revenues increased 95% to $23.4 million. The New Media segment reported revenues of $27.6 million in the second quarter, up 89% year over year while Other segment contributed $0.3 million to revenues compared with $1.2 million in the prior-year quarter.

At the end of the quarter under review, the company had $75.1 million of cash and cash equivalents compared with $110.8 million at the end of 2015.

Operating cash flow consumption at the end of the second quarter of 2016 totaled $57.0 million compared with $7.3 million at the end of the same quarter in 2015.

DREAMWORKS ANIM Price, Consensus and EPS Surprise

DREAMWORKS ANIM Price, Consensus and EPS Surprise | DREAMWORKS ANIM Quote

Acquisition Update

DreamWorks is on track to be acquired by Comcast Corp. CMCSA. The deal is expected to close by the end of this year, subject to customary closing conditions.
 
Zacks Rank & Stocks to Consider

DreamWorks presently carries a Zacks Rank #4 (Sell). Better-ranked stocks in the sector include MSG Networks Inc. MSGN and World Wrestling Entertainment Inc. WWE, both of which carry a Zacks Rank #2 (Buy).

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