DreamWorks Animation said it would take a $57-million write-down for its latest animated movie "Mr. Peabody & Sherman" in response to the movie's weak box office performance.
The write-down contributed to a net loss of $42.9 million, or $0.51 per share, on revenue of $147.2 million, in the first three months of this year. That compares with revenue of $134.6 million and earnings of $5.6 million, or $0.07 a share during the same period a year ago, the Glendale studio reported.
"Mr. Peabody & Sherman," which was released March 7, has grossed $261 million at the worldwide box office to date, well below that of a typical DreamWorks movie.
"The box office shortfall of 'Mr. Peabody & Sherman' is evidence of the current challenges we face within our feature film segment, and restoring the strength in our core business is my No. 1 priority today," said Jeffrey Katzenberg, Chief Executive Officer of DreamWorks Animation. "Our next film is 'How to Train Your Dragon 2' on June 13 ... and I am confident that its performance will put us back on track to once again reach the levels of box office success that we've achieved historically."
From "Lion King" director Rob Minkoff, "Mr. Peabody and Sherman" is based on the popular characters from the 1960s animated television series "The Rocky and Bullwinkle Show." It was the first DreamWorks animated movie to feature characters from the "Classic Media" library since DreamWorks acquired the company's library in 2012.
The movie was the latest box-office misfire for DreamWorks, which has had a bumpy track record over the last two years.
Last year, the studio took an $87-million write-down for "Rise of the Guardians," holiday movie which was a co-production of British firm Aardman Animations. The studio laid off 350 people after announcing the write-down in February.
The latest write-down was expected by analysts, some of whom had lowered their forecasts and downgraded their rating on the company's stock, which has fallen about 25% this year.
This week Bank of America Merrill Lynch downgraded its rating to "underperform" from neutral and cut its estimates for DreamWorks Animation due to the weak performance of "Mr. Peabody & Sherman."
However, analysts expect the studio will bounce back with its upcoming "How to Train Your Dragon 2."