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Katzenberg Slates ‘Dragon’ Sequel for 2013

With no big holiday release, studio reports 65% Q1 profit drop, but it’s really high on its new 3D movie

DreamWorks Animation announced a first-quarter profit drop of 65 percent Tuesday, an expected result due to the studio’s lack of a big holiday title last year.

In fact, DreamWorks animation CEO Jeffrey Katzenberg was so fine with it, he announced a sequel, slated for 2013, to the studio’s big first-quarter 3D release, “How to Train Your Dragon.”

“(The year) is off to a strong start, thanks in large part to the performance of ‘How to Train Your Dragon,’” he told investors.

"Dragon," which got off to a softer-than-expected $43.7 million start on March 26, didn’t register a huge impact in the first quarter ended March 31.

However, with stellar reviews and word-of-mouth, the Paramount-distributed film has declined less than 20 percent each week at the domestic box office, and has grossed $375 million to date.

DreamWorks, which actually exceeded Wall Street’s expectations for the quarter, reported revenue of $162.1 million and profit of $21.7 million for the quarter ended March 31.

That unfavorably compared to revenue of $263 million and a profit of $62 million for the same quarter of 2009, when the bulk of TV and DVD revenue for holiday release “Madagascar: Escape 2 Africa” was recouped.

The studio also had pay TV and disc sales for 2008 summer release “Kung Fu Panda” to factor into that quarter, as well as the premiere weekend of 3D hit “Monsters vs. Aliens,” which opened to $59.3 million.

While first-quarter performance suffered due to comparison, second-quarter numbers should be strong for "DreamWorks," with the bulk of "Dragon’s" theatrical revenue registering in those books.

The studio’s second-quarter earnings will also be augmented by the May 3D release of “Shrek Forever After.”