On the Call: DreamWorks CEO Jeffrey Katzenberg

DreamWorks Animation SKG Inc. on Tuesday reported second-quarter earnings that beat Wall Street forecasts and said cheaper advertising and its bigger film lineup will mean cost savings ahead.

The animated movie house has committed to producing five movies every two years, up from four previously, and has said all of them will be produced in 3-D. Its first 3-D movie, Monsters vs. Aliens, has grossed $377 million worldwide since its March release, around half of which came from theaters equipped to show it in 3-D.

There is a general concern, however, that the conversion of screens to show 3-D movies has been delayed because of the credit crunch that began last year. Today, about 2,500 of the 38,800 movie screens in the U.S. can handle digital 3-D, at least 1,000 screens short of what's necessary for a big event movie premiere. As a result some showings continue to be in 2-D.

DreamWorks Chief Executive Jeffrey Katzenberg addressed the rollout in a conference call on Tuesday.

QUESTION: "I think you envisioned 6,000 to 7,000 3-D screens for Shrek 4 next May. Any updated thoughts there? I mean, are we at risk of not getting to that number given the delay with the digital rollout?"

ANSWER: "I think it is too early to know where we are going to end up. I would say I don't have the same level of confidence that we will be at 7,000 screens. On a worldwide basis, we will be at 7,000 screens ... The good news is that all of the exhibitors independently are now moving forward on very aggressive programs to roll out 3-D ... Everybody has seen the results. There's no question. I mean, you look at the international performance on Ice Age, which is spectacular, and in particular its 3-D performances are kind of off the chart, so pretty much throughout the world, exhibition is now chasing this, as opposed to us chasing them."

Source: The Associated Press