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Weak ‘Puss’ Opening Disappoints DreamWorks Investors
DreamWorks Animation’s Puss in Boots is tops at the box office, but that’s not translating into admiration on Wall Street.
Shares in the company fell 8 percent on Monday on news of Puss in Boots‘ $34 million opening weekend, which was good enough to make it No. 1 at the box office but well below investor expectations.
Analysts speaking to media outlets said the film needed to open with $40 million to $45 million to make a profit on the film’s estimated production budget of about $130 million. Cowen & Co. analyst Doug Creutz told Yahoo! Finance that Puss had the lowest opening of any DreamWorks Animation film since Antz in 1998. Some analysts admitted the film could recover if it gets good word of mouth, and also pointed to the final game of the World Series on Friday and bad weather in the east as factors that may have limited attendance and were beyond the studio’s control.
But most indicated it’s getting tougher for DreamWorks to turn a profit given its current cost structure combined with increased competition from other studios’ animated features and a weakening market for DVD and home video.