Post by The Ultimate Nullifier on Jul 29, 2014 20:04:20 GMT -6
variety.com/2014/film/news/sec-investigating-dreamworks-animations-13-5-million-turbo-writedown-1201271335/
During its second quarter earnings call, DreamWorks Animation disclosed an ongoing investigation with the U.S. Securities and Exchange Commission regarding the $13.5 million writedown of film inventories the studio took on “Turbo” in February.
The studio’s stock was down 7.3% in post-market trading after the studio disclosed its losses. Immediately after the SEC announcement, shares were down 8.9% and by 2 p.m. Tuesday had dropped by 9.3%.
“Turbo,” DreamWorks Animation’s $135 million July 2013 release that revolves around a supercharged snail, earned just $282.6 million at the global box office. News of the writedown was announced during its fourth quarter 2013 earnings call.
On Tuesday, executives declined to offer any further comment or details on the investigation.
This is not the first writedown the studio has taken.
Disappointing box office results for “Mr. Peabody & Sherman” led to a larger $57 million writedown in the first quarter of 2014. In November 2012, DreamWorks said it would take a writedown of $87 million on “Rise of the Guardians,” an adventure featuring holiday legends like Santa Claus and the Easter Bunny. That was only one part of the $165 million charge the studio took in the fourth quarter of 2012.
“I don’t think this will really affect (DreamWorks) day-to-day,” said Tuna Amobi, an equity analyst at S&P Capital IQ who was on the earnings call. “Obviously anytime something like this happens, as an investor, there is a worry. There is a headline risk and it’s a distraction for management.”
In April 2012, DreamWorks Animation was part of a five-studio investigation into illegal payments made to officials in China in exchange for the right to film and show movies in the territory. The SEC has not yet released a report of their findings.
During its second quarter earnings call, DreamWorks Animation disclosed an ongoing investigation with the U.S. Securities and Exchange Commission regarding the $13.5 million writedown of film inventories the studio took on “Turbo” in February.
The studio’s stock was down 7.3% in post-market trading after the studio disclosed its losses. Immediately after the SEC announcement, shares were down 8.9% and by 2 p.m. Tuesday had dropped by 9.3%.
“Turbo,” DreamWorks Animation’s $135 million July 2013 release that revolves around a supercharged snail, earned just $282.6 million at the global box office. News of the writedown was announced during its fourth quarter 2013 earnings call.
On Tuesday, executives declined to offer any further comment or details on the investigation.
This is not the first writedown the studio has taken.
Disappointing box office results for “Mr. Peabody & Sherman” led to a larger $57 million writedown in the first quarter of 2014. In November 2012, DreamWorks said it would take a writedown of $87 million on “Rise of the Guardians,” an adventure featuring holiday legends like Santa Claus and the Easter Bunny. That was only one part of the $165 million charge the studio took in the fourth quarter of 2012.
“I don’t think this will really affect (DreamWorks) day-to-day,” said Tuna Amobi, an equity analyst at S&P Capital IQ who was on the earnings call. “Obviously anytime something like this happens, as an investor, there is a worry. There is a headline risk and it’s a distraction for management.”
In April 2012, DreamWorks Animation was part of a five-studio investigation into illegal payments made to officials in China in exchange for the right to film and show movies in the territory. The SEC has not yet released a report of their findings.