The Breakdown

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DreamWorks rules the weekend box office with 'The Croods' but still has business challenges

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DreamWorks endured a big flop over the holidays with “Rise of the Guardians,” then it laid off hundreds of animators. But its latest movie, “The Croods,” led the box office this past weekend.

It’s too early to say that the Glendale-based studio, with such past hits as "Shrek" and "How to Train Your Dragon," has solved its problems. 

But “The Croods,” the 3-D comic tale of a slightly messed up prehistoric family starring the voices of Emma Stone and Nicolas Cage, did take in nearly $45 million on release, a strong indication that the DreamWorks is at least beginning to rebound.

The studio — which laid off 350 animators and took an $87 million hit to its bottom line in 2012 due to the failure of "Rise of the Guardians" — was understandably pleased. Chief Marketing Officer Anne Globe touted the studio's new distribution deal with 20th Century Fox (it switched from Paramount last year) and looked forward to a very good spring break for "The Croods."

"We believe the film will enjoy many weeks of success during the school holidays.  With only 60 percent of the worldwide market open to date, we are optimistic the positive trend will continue," she said. 

But one good weekend at the box office does not a turnaround make. DreamWorks is going to need to make some changes to its business.

Michael Corty, an analyst who covers DreamWorks for Morningstar, said that the company is dealing with an audience whose attention span has been fragmented. Everyone knows that DreamWorks can make an excellent animated film. But that's not enough to sustain a business anymore, especially because DreamWorks only releases a few movies each year.

"Their competition is not only with other films of the same genre, it’s with all movies in general, and more importantly, it’s with all entertainment options," Corty said.

He points out that DreamWorks has in the past only released a few movies each year, but the studio has a history of delivering hits. 

The poor performance of "Rise of the Guardians" was an exception to DreamWorks’ track record. Now the studio needs to build on the success of "The Croods," the 3-D comic story of a troubled prehistoric family.

"In terms of morale, having a movie do well in the opening weekend is definitely a good start after a rocky few past months," Corty said. "The hope is that the 'Croods' continues to do well at the box office and their next few films also do as well and they can carry that momentum forward."

Overall, the U.S. box office numbers are setting a weaker pace in 2013. So far, the top movies are raking in 35 percent less than at this time last year.

But DreamWorks has already grabbed its share and sent a signal to Wall Street that the bleeding has stopped, for now.

Correction: An earlier version of this story misspelled Nicolas Cage's name.

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