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'Turbo' off to slower-than-expected start at box office

July 23, 2013

Shares of DreamWorks Animation SKG Inc. fell 4.5 percent Monday after an analyst predicted a writedown of as much as $50 million on the new movie “Turbo,” citing a disappointing opening at the box office.

The movie, about a speedy snail who aspires to compete in the Indianapolis 500, saw ticket sales of $21.5 million this past weekend. At that rate, “Turbo” may not reach $100 million during its run in U.S. and Canadian theaters, Piper Jaffray analyst James Marsh wrote in a research note.

The Indianapolis-based IndyCar Series and open-wheel racing enthusiasts were hoping the movie would create a buzz about the sport, but interest has fallen short of expectations so far.

Shares in DreamWorks, based in Glendale, Calif., declined to $23.77 at  Monday's closing. Stock in the independent film studio is still faring well this year, up 43 percent.

The film had a slower start than “Rise of the Guardians,” DreamWorks Animation’s 2012 release that opened with $23.8 million weekend in November and led to an $87 million writedown.

“While reviews have been positive for ["Turbo"] and could help build word of mouth, at this stage we think it will be lucky to hit $100 million in the current competitive environment,” Marsh wrote.

The analyst, who previously had estimated a $140 million total domestic take for “Turbo,” dropped his forecast for international receipts to $225 million, down from $260 million.

The Rotten Tomatoes website, which compiles reviews from critics and audience members, says 65 percent of the 72 critics gave the movie a positive review. About 73 percent of the nearly 30,000 audience members who rated it gave it a favorable rating.

A review from IBJ Arts & Entertainment Editor Lou Harry said the film may appeal to young children but leave older viewers less than exhilarated. He did praise its treatment of the Indianapolis Motor Speedway.

Opening-weekend figures don’t always reflect a movie’s potential, particularly in markets outside the United States, said Allison Rawlings, a DreamWorks Animation spokeswoman. “Turbo” has yet to open in Europe, Korea and China. The film opened on a weekend crowded with four new movies plus the animated holdover hit “Despicable Me,” she said.

“It’s certainly too early to tell” about the movie’s performance, Rawlings said. “The film resonates really well with our core audience.”

“Turbo” won a top “A” rating from CinemaScore, a Las Vegas-based research firm that asked audience members to grade movies from “A” to “F” after seeing them on opening day.

Since the July 17 opening, “Turbo” has generated an estimated $31.2 million at domestic theaters, according to researcher Box Office Mojo. Benjamin Mogil, an analyst at Stifel Nicolaus & Co., had originally estimated $40 million at this point.

Merchandising and better terms with new distributor 21st Century Fox Inc. may help DreamWorks Animation avoid a writedown on the scale of “Guardians,” Piper’s Marsh wrote. That movie generated $303.1 million worldwide, including $103.4 million domestically, according to Box Office Mojo.

DreamWorks Animation signed a five-year film distribution agreement with Fox last August, ending a six-year pact with Viacom Inc.’s Paramount Pictures. The Fox deal allows DreamWorks Animation to keep rights to domestic television revenue and provides lower digital distribution costs.

Merchandising for “Turbo” will benefit from cross-promotion with a planned television show based on the characters that will appear on Netflix Inc.’s Web-based subscription service, Marsh said. The movie also will appear on Netflix.

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