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Stock Market & Financial Investment News

News Breaks
July 30, 2014
11:42 EDTDWADreamWorks falls after Q2 results miss, SEC probe disclosed
Shares of animated film-maker DreamWorks Animation (DWA) are tumbling after the company reported worse than expected second quarter financial results and revealed that the SEC is investigating its 2013 writedown on the movie "Turbo." WHAT'S NEW: DreamWorks Animation experienced a Q2 earnings per share loss of (18c), while analysts were expecting a loss of (2c). The company's Q2 revenue was $122.3M, which was below analysts' consensus of $137.86M. WHAT'S NOTABLE: During the company's conference call, DreamWorks said the SEC is investigating its 2013 writedown on the movie "Turbo," but noted that it is cooperating with the probe. Looking ahead, the company says that the continued performance of "How to Train Your Dragon 2" at worldwide box offices is expected to be the primary driver of its Q3 results. Significant events for Q4 include the theatrical release of the "Penguins of Madagascar " on November 26, as well as its home video/home entertainment release of both "Mr. Peabody & Sherman" and "Dragon 2." The company called 2014 an "investment year," as it is aiming to continue investing "heavily" in each of its areas of growth and expects its spending to continue during the second half and into next year. Commenting on to its Television unit, DreamWorks says it remains on track to debut 3 new series in the second half of the year and 7 new series in 2015. The company continues to expect that its 2015 television revenue will exceed $250M and that its profit margin for this segment will approach 30% as it ramp up production and delivery. ANALYST OPINION: Piper Jaffray analyst James Marsh is maintaining his Neutral rating on the shares as he expects the stock to continue to trade "sideways" until better perspective on the company's diversification efforts become evident. Marsh said he expects DreamWorks' investment spending and the SEC probe into the company's "Turbo" writedown will pressure shares. He said that he isn't certain about the nature of the investigation beyond the few remarks from management on the company's call, but based on what he knows at the moment, Marsh said that he doesn't see any big issues stemming from the probe. PRICE ACTION: During late-morning trading, shares of DreamWorks fell $3.15, or 14%, to $19.51.
News For DWA From The Last 14 Days
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February 26, 2015
12:00 EDTDWADreamWorks management to meet with Piper Jaffray
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10:36 EDTDWAOptions with decreasing implied volatility
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February 25, 2015
11:47 EDTDWAAnalysts clash on DreamWorks following Q4 miss
The shares of animated film and television show maker DreamWorks (DWA) are rising, despite the weaker than expected results reported by the company last night. Two analysts offered very different views on the company's outlook following its results. BACKGROUND: DreamWorks last night reported a fourth quarter per share loss of ($3.08), versus analysts' consensus outlook for a ($3.01) per share loss. The company's revenue also came in below expectations. Excluding $210M in pre-tax charges associated with DreamWorks' restructuring plan, its loss was (75c) per share, the company stated. BEARISH TAKE: In a note to investors today, FBR Capital analyst Barton Crockett wrote that DreamWorks' results were "ugly," as they included $155M of write-offs on films and TV shows. However, Crockett believes that the crucial factor for the company's outlook is whether it can consistently compete with the entertainment giants, including Disney (DIS), Viacom (VIA), and Time Warner (TWX). Crockett is not convinced that DreamWorks will be able to hold its own, and he believes that its 2015 results could come in below expectations. The analyst warned that the company may have difficulty meeting its 2015 consumer products revenue guidance. DreamWorks expects its consumer products revenue to double this year, but the movie-based toy space is "very competitive" in 2015, as toys based on multiple popular children's films are set to be released, Crockett stated. Moreover, after conducting checks online, Crockett reports that there does not seem to be a great deal of interest in DreamWorks' movie "Home," which is set to be released on March 27. He kept an Underperform rating on the shares and raised his price target on the stock to $14 from $12. BULLISH TAKE: DreamWorks' results were mixed, but the results are not very important, Piper Jaffray analyst James Marsh stated. The company's guidance for its TV and consumer products businesses were solid, the analyst believes. Moreover, the company "took specific and decisive action" to avert a liquidity crunch, Marsh wrote. Specifically, DreamWorks raised $185M of capital by selling its real estate in Glendale, California and then leasing it back, and increased the size of its current credit facility to $450M from $400M, Marsh reported. The moves should "largely" eliminate investors' worries about the company's liquidity position, Marsh stated. He kept a $26 price target and Overweight rating on the stock. WHAT'S NOTABLE: On DreamWorks' earnings conference call last night, the company's CEO Jeffrey Katzenberg stated that it did not obtain more than 10% of its revenue from Netflix (NFLX) last year. However, in an SEC filing earlier this morning, DreamWorks clarified that it had obtained 14.9% of its revenue from Netflix last year. PRICE ACTION: In late morning trading, DreamWorks rose 5.6% to $22.31.
10:37 EDTDWAOptions with decreasing implied volatility
Options with decreasing implied volatility: FUEL GREK NLNK HLSS SLXP LL VNDA AWAY DWA TRUE
09:08 EDTDWAOn The Fly: Pre-market Movers
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08:26 EDTDWADreamWorks could struggle to meet 2015 outlook, says FBR Capital
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07:01 EDTDWADreamWorks Animation addresses liquidity issues, says Piper Jaffray
Piper Jaffray believes DreamWorks Animation took "specific and decisive" actions to abate any liquidity concerns with the sale of the company's Glendale real estate and the expansion of its credit facility. Piper says that while 2015 is a transition year with only one feature film release, it is "increasingly bullish" about the prospects for DreamWorks in 2016. It reiterates an Overweight rating on the stock with a $26 price target following the company's Q4 results.
February 24, 2015
18:15 EDTDWAOn The Fly: After Hours Movers
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16:15 EDTDWADreamWorks Animation reports Q4 EPS ($3.08), consensus ($3.01)
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15:21 EDTDWANotable companies reporting after market close
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February 23, 2015
14:54 EDTDWADreamWorks Animation volatility elevated into Q4 and outlook
DreamWorks Animation March call option implied volatility is at 58, April is at 51, June is at 49; compared to its 26-week average of 46 according to Track Data, suggesting large near term price movement into the expected release of Q4 results on February 24.

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