Saturday, April 05, 2014

Barrons' Viewpoint

... On DreamWorks Animation shorter and longer-term future:

... With Mr. Peabody & Sherman running 20%-plus behind the top 15 overseas regions for Turbo, we are lowering our ultimate global box office from $285 million to $265 million. And with a $10 million higher production cost than Turbo, we are anticipating an impairment charge of $30 million to be taken within the first-quarter results. ...

But wait, there are better times beyond! ...

We continue to believe the upcoming global mid-June release of How to Train Your Dragon 2 is likely to provide that necessary positive spark to drive shares back into the $30s.

Keep in mind the original How to Train Your Dragon in March 2010 has already been the best-performing domestic film for DreamWorks outside of the Shrek franchise with $218 million domestically and $495 million globally. With an increased level of licensing and consumer-product support, stronger knowledge among children with a TV series on Cartoon Network since 2012, greater 3-D format penetration globally as well as IMAX (IMAX) releasing the film on its screens internationally, we project the sequel's global box office should come in 50%-plus higher than the original. ...

The green eye-shade boys often provide analysis about box office performance that balances nicely with the over-heated trade paper prognoses. How to Train Your Dragon, with winged reptiles diving through layers of clouds, lends itself nicely to Moving View Master. And while 3-D features don't pack them in across the fruited plain like they used to, they are still potent draws in many foreign lands.

So Forbes is likely correct: How to Train Your Dragon II will pull in major coin. But it won't just be the IMAX theaters, or the support of the t.v. version. It's because -- if studio buzz is right -- that the picture delivers story-wise. Great visuals and wise screens are important, but a tale that's well told is what ultimately scores at the box office.


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