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'Dragon' doesn't set DreamWorks shares on fire

March 29, 2010 |  9:55 am

DRAGON

Wall Street had a cool reaction Monday morning to the less-than-fire-breathing performance of DreamWorks Animation's latest 3-D movie, "How to Train Your Dragon. " The Glendale company's stock dropped 9.2 % to $38.87 in morning trading.

"Dragon" pulled in $43.3 million in tickets sales in the U.S. and Canada this past weekend, well below the $60 million many analysts had anticipated. The opening also pales in comparison with DreamWorks Animation's last release, "Monsters vs. Aliens," which took in $59.3 million in its debut. The 27% difference in opening numbers for "Dragon" compared with "Monsters" is in spite of the fact that "Dragon" played on more 3-D screens, which generate higher ticket prices. Furthermore, several theater chains upped the prices to consumers on 3-D movies this past weekend.

"Dragon's below expectations performance is somewhat disappointing, given DreamWorks' ability to secure a large number of 3-D screens worldwide," wrote Wedbush Securities analyst Michael Pachter. "How to Train Your Dragon" was shown in 2,178 3-D theaters, well above the 1,550 3-D venues for "Monsters vs. Aliens" on its opening weekend.

Competition for scarce 3-D screens has been fierce among studios, prompting complaints from exhibitors that Paramount Pictures, the film's distributor, was pressuring them to reserve the limited supply of 3-D screens for "Dragon."

Nonetheless, Pachter said he expected strong reviews and "widespread consumer demand for 3-D" will build the movie's performance.

Although Dragon should benefit over the next week from spring break and the Easter holiday, it faces more competition later this week when Warner Bros. releases its 3-D film "Clash of the Titans." 

"We are concerned that what looks likely to a be strong box office performance by 'Clash of the Titans' could drive erosion of 'Dragon's' 3-D screen count after next weekend," wrote Doug Creutz, an analyst with Cowen and Co.

-- Richard Verrier

Photo: A scene from "How to Train Your Dragon. Credit: Associated Press / Paramount

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