SEC Probes Into DreamWorks' 'Turbo' Write-Down
U.S. Securities and Exchange Commission is investigating the write-down DreamWorks Animation SKG, Inc. took on their 2013 film "Turbo". The investigation was revealed during a conference call with analysts after the studio disclosed their second-quarter earnings.
For the second quarter this year, the movie studio reported a loss of $0.18 per share. The company got total revenue of $122.3 million and suffered a net loss of $15.4 million. Compared to the same quarter last year, the group managed to draw a net income of $22.3 million.
DreamWorks' stock fell down around 7.3% shortly after the studio announced the financial results for the second quarter. After news broke out that SEC was conducting investigation into the company's write-down, shares were down 8.9% and continued to slide down by 9.3%.
"Turbo" voiced by Ryan Reynolds was released in December 2013. Costing around more than $100 million to produce, the animation about a snail with super-speed powers earned just $83 million and $199 million overseas for a global cume of approximately $282 million.
During the fourth quarter 2013 earnings call in February this year, DreamWorks announced a $13.5 million write-down for the movie. During the recent earnings call, the suits at the studio offered few details on the SEC investigation, only saying they were cooperating with officials.
It's not the only write-down DreamWorks took on their movie. Back in November 2012, the studio announced a write-down of $87 million of "Rise of the Guardians" and took a $57 million write-down on 2013's "Mr. Peabody & Sherman" in the first quarter of this year.
DreamWorks, home to popular series like "Madagascar" and "Shrek", is expected to fare better in the third quarter year with the help of "How to Train Your Dragon 2", which was a success as pointed out by Jeffrey Katzenberg. Released in the U.S. last month, the 3D movie raked in $424 million worldwide so far.
" 'How to Train Your Dragon 2' is the ninth highest-grossing film of the year so far on a worldwide basis and it has yet to be released in several significant international territories," said the CEO. "It will be a highly profitable film for the Company and DreamWorks Dragons will remain a very valuable franchise for many years to come."
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