By Ryan Faughnder
1:21 PM EDT, July 22, 2013
Shares of DreamWorks Animation fell more than 7% Monday after analysts said the company could face a write-down after animated film "Turbo" had a disappointing opening weekend at the box office.
"Turbo," which features the voice of Ryan Reynolds as a snail with dreams of winning the Indy 500, had a sluggish debut, bringing in $21.5 million over its first weekend in release.
Piper Jaffray analyst James Marsh, who has a "neutral" rating on the stock, said the film's poor box office performance could result in a write-down of $30 million to $50 million.
If that happened, it would be the company's second write-down on a film this year, after taking an $87- million hit from "Rise of the Guardians" in February. "Weak box office performance like this will likely lead to chatter of a material writedown," wrote Marsh, in a note to clients.
The stock has dropped about 13% in the last five days, falling to $23.30 as of mid-day Monday. However, the shares are up more than 50% this year.
Doug Creutz, an analyst at Cowen & Co., said the film, which cost $135 million to make, is unlikely to make $100 million domestically or "turn a significant profit." He noted the film could perform better overseas.
"Turbo got off to a very soft start," he said in a note to clients. "We expect the stock to react negatively over the next couple of weeks as the impact of two non-profitable films in three releases settles in."
Still, he said, the Glendale-based DreamWorks may not take a write-down in its next quarterly earning report. "However, we think a writedown remains possible over the next few quarters depending on how things play out," he wrote.
Still, "Turbo" was well-received among viewers, earning an A from audiences on CinemaScore, and was reviewed generally positively, generating a 66% fresh rating on Rotten Tomatoes.
It could make up ground abroad. DreamWorks Animation's last release, March's "The Croods," grossed 68% of its $582.3 million global tally overseas.
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