DreamWorks reports falling DVD Sales

DreamWorks is in trouble. The DVD sales of the movies produced by the company are falling resulting in declining profits and dampening share values in the market. And with additional news of the US regulators increasing their attention towards the functioning of the company’s trade in the market, the outlook for the company is even more shaken. The value of the shares of the company fell down by around 14.5% to touch a low of USD 22.91.

The company has blamed this on the falling sales of their popular DVDs and higher than expected returns of the home video. The company has also updated its returns for the next quarter to a loss of 7-9 cents per share from the earlier expected break-even levels. The company also said that they are complying voluntarily with a request from the Securities and Exchange Commission (SEC) concerning the trading of its stocks. They also clarified that they have not broken any law and are just following the rules of the US regulators.

The company also added that their full year’s earnings would come to around 80 to 90 cents, rather than the $1 to $1.25 they had earlier expected. The company is popularly known for their Shrek movies and their latest hit has been the animated movie Madagascar. The movie is a hit but unlike in the earlier days, DVD sales are not very good and more and more movie stores are returning unsold from the video rental stores.

Market analysts believe that the trends are going common for many other movie studios around. People are no longer buying DVDs in a way they used to a couple of years back. As a result, the shelf life of movies is decreasing with studios requiring to produce more material to launch in the market. Even Pixar last month reported similar trends with their popular movie The Incredibles.

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