Despite the strong box office performance of Kung Fu Panda 2, which grossed US$665 million worldwide, weak DVD sales for the movie contributed to a significant decline in profit and revenue for DreamWorks Animation in the latest fourth quarter.
Fourth-quarter revenue dropped 21% to US$219 million from US$276 million a year ago and net income fell 71% to US$24 million from US$85 million in 2010.
For the full year 2011, the company’s net income fell by 49% to US$86.8 million on revenue of US$706 million, down 10% from 2010.
Kung Fu Panda 2 contributed US$49.6 million to revenues in the latest quarter, mostly through home-entertainment sales, while Puss In Boots added approximately US$23.8 million to revenue and Megamind contributed US$19.4 million, mostly through international pay-television revenue.
Puss in Boots, which cost more than US$130 million (more than an average DreamWorks film according to CEO Jeffrey Katzenberg), generated US$149.2 million in domestic ticket sales contributing to a total gross of US$532.7 million worldwide.
The news of drop in profits comes after DreamWorks Animation signed a joint-venture deal with investment fund China Media Capital and Shanghai Media Group to launch a production studio in Shanghai, hoping to tap into the world’s most populous market.
DreamWorks executives have reported the first film under the JV will be released in theaters in 2016.
For 2012, the studio is banking on revenue from Madagascar 3, which opens June 8, and the contemporary fairytale Rise of the Guardians.