Como se combate o populismo? "Com eleições", responde Fukuyama

[Jameson]

DreamWorks Animation, SKG (DWA) 23.13 -3.68: So is it just poor planning and overly aggressive forecasting or perhaps a larger industry-wide trend? The market awoke Monday morning to more bad news out of the entertainment industry as DreamWorks, yet again, lowered expectations. The studio cited what it called "changes in the marketplace" negatively impacting DVD sales resulting in considerably lower earnings for the second quarter and the full year. Shares in DWA, along with Pixar (PIXR), have suffered extreme selling pressure as both companies have overestimated demand for DVD receipts this year sparking a downdraft in earnings.

This is the second time in just three months the studio has lowered guidance as it continues to struggle gauging sales of its home video titles. Today, DreamWorks Animation slashed estimates for the second quarter now expecting a loss of ($0.07-0.09) per share as demand for "Shrek 2" DVD continues to drop off. Its previous guidance called for no profit for the quarter. The Street didn't seem to catch on the last time with consensus estimates currently well outside of the DWA's guidance at $0.15 for Q2. The news parallels a similar release last month from Pixar, which too guided lower after sales of "The Incredibles" were less than super.

Obviously a net loss of this magnitude will have an impact on the full year results. As such, DreamWorks now expects EPS to come in the range of $0.80-0.90 down from its previous guidance of $1.00-1.25 and consensus of $1.57. So what did DWA have to say regarding the cause of the huge miss? CEO, Jeffrey Katzenberg commented "We have observed changes in the marketplace that appear to have impacted our titles. While it is too early to determine if these changes are temporary or permanent, we think it is prudent at this time to adjust our guidance to reflect higher than expected returns as well as revisions to our video forecasts."

DWA also announced it would not proceed with $500 mln secondary offering, and that it's the subject of informal SEC investigation. The investigation is an informal probe into trading in shares following its disappointing financial results for Q1 on May 10th. The stock fell 5% before the release after Newsweek reported Katzenberg told insiders the company's pending results would miss expectations. The secondary offering has been a significant overhang on the stock as the market awaited investors Lee Entertainment, Vivendi Universal Entertainment, and Paul Allen to sell shares. The delay of the secondary is certainly not surprising considering the stock is now trading below its IPO price of $28 per share.

There was much conjecture following the repeated disappointing earnings from Pixar and DreamWorks whether there were seasonal issues at play implying a one-time hiccup due to poor planning, or perhaps a industry-wide slump.

While it's too early to make a concrete argument, there are factors weighing on DVD sales. Our entertainment options have expanded exponentially as broadband Internet has unleashed a vast marketplace of online movies, books, music, and video games. Expanded in-home entertainment alternatives have moved in on an otherwise DVD dominated market. Further, the marketplace has become highly competitive in all genres not just computer-animated films. Mass market retailers are acting more like theater owners wanting to refresh shelves with new releases each week, therefore titles need to hit it big the first weekend or face a tug-of-war over shelf space.

We see no reason investors should wade into these uncertain waters in the near-term, as the downside pressure is just too great. These are hit-driven companies that rely heavily on the success of single features and considering the box office performance, face increasing risk of continuing to miss the mark. There are no catalysts on the horizon for DreamWorks until the release of "Madagascar" on DVD in Q4 (let's hope they have learned their lesson) and the fall release of "Wallace & Grommit: The Curse of Were-Rabbit."6x forward earnings vs. its 5-year average of 23.3x.

----Kimberly DuBord, Briefing.com

[Jameson]

penso q revista Premio tinha uma artigo de uma pagina sobre ela

mas já tens um artigo do Fool.com sobre a queda de hoje:

DreamWorks Not So Dreamy

By Stephen D. Simpson, CFA
July 11, 2005

What happens when a company sends out more product than retailers can sell? That product comes back, and earnings take a hit. For further reference, see DreamWorks Animation (NYSE: DWA) today.

Because of disappointing home-video sales of movies such as Shrek 2 and Shark Tale, DreamWorks saw a higher-than-expected level of returns, which in turn led to lower-than-expected results. Instead of a breakeven result for the quarter, the company is now looking for a loss of $0.07 to $0.09 per share.

Even worse for the company, this appears not to be a completely isolated problem. DreamWorks no longer seems to be expecting much of a contribution from Shrek 2 for the rest of the year, and annual guidance has been cut to a range of $0.80 to $0.90, versus the mean analyst estimate of $1.39.

Investors who follow this space might notice some parallels with rival Pixar's (Nasdaq: PIXR) recent issues with home sales of The Incredibles. There, too, lower sales led to higher returns and lower earnings for the quarter.

I'm not about to make excuses for either company, but this is a part of the business that investors need to understand and accept. It's very difficult to project the exact level of future home-video demand. And I think most people would agree that it's better to be a bit optimistic and put out too much product than to be too conservative and miss potential sales. As long as both companies continue to churn out popular and profitable movies, these issues should just be transitory.

That wasn't the only news for DreamWorks today, though. The company also announced that because of current market conditions, investors pulled their secondary offering. Investors including Jeffrey Katzenberg, David Geffen, and Paul Allen (through his Vulcan Ventures) had intended to sell as much as $500 million worth of shares. This offering wouldn't have diluted shareholders, but it would have represented a sizable chunk of stock coming to the market.

The good news -- such as it is -- is that three of the folks who know the company best don't want to sell at or near current prices. Of course, it's not as though any of these gentlemen are hurting for lunch money, so they don't really need to sell shares. Still, the fact that they think DreamWorks' shares are undervalued is a point in the stock's favor.

The company also announced an informal investigation by the Securities and Exchange Commission related to trading in the company's shares around the last earnings announcement.

So with the stock having dropped by 12% as of this writing, what should investors do? Well, I am by nature a contrarian, so when other people are running for their lives, I'm looking for opportunity. Of course, there's always that fine line between "savvy contrarian" and "stubborn lunatic."

I'm not all that put out by the SEC investigation, but I do think this is a challenging industry. Like the airline industry, the movie business seems to be dominated by outsized personalities and egos and not so much by sound, long-term business strategies.

Nevertheless, Pixar and DreamWorks Animation have both shown that they have a keen sense for developing products that are popular and family-friendly. With intelligent and well-heeled investors choosing to sit tight rather than bail out, I'm thinking that DreamWorks Animation might be getting close to that "cheap enough to take a chance" level.

DreamWorks Animation SKG, Inc. is principally engaged in developing and producing computer-generated (CG) animated feature films. The Company makes CG animated films meant for a broad movie-going audience. The Company has theatrically released a total of nine animated feature films, four of which have been CG-only and one direct-to-video title. DreamWorks Animation's four CG animated feature films are Antz, Shark Tale, Shrek and Shrek 2. The Company's five non-CG animated feature films are Sinbad: Legend of the Seven Seas; The Road to El Dorado; Spirit: Stallion of the Cimarron; The Prince of Egypt, and Chicken Run. The Company was formed upon its separation from DreamWorks L.L.C. (DreamWorks Studios). Prior to which, it was a business division of DreamWorks Studios.

[Rui12ld]

A Dreamworks animation (DWA.NYSE) afinal o que faz? O site http://www.dreamworksanimation.com/ é bastante fraquinho e fico com a duvida se aquelas são as únicas produções deles.

Isto porque a Guerra dos Mundos para além da paramount também faz menção a dreamworks. Presta então o que? Apoio técnico a produção de filmes?

Bem, os fundamentais parecem-me razoáveis pelo que não creio que descidas como as de hoje se possam vir a repetir.

Também ouvi dizer que Seinfeld o filme teria a chancela dreamworks, alguém confirma?
E para quando o shrek 3?

Abraço