DreamWorks Animation SKG Inc (DWA) Tuesday posted lower-than-expected earnings due to weak DVD sales for its hit film "Shrek 2," sending the company's share price down 14 percent in after-hours trade.

Glendale, Calif.-based DreamWorks (search) posted net earnings of $45.7 million, or 44 cents a share, compared with a net loss of $25.5 million, or 33 cents a diluted share for the same period in 2004.

Analysts' polled by Reuters Estimates expected earnings of 57 cents a share for the latest first quarter, excluding some items, and 59 cents per share net.

The company reported revenue of $166.9 million in the quarter, compared with $40.8 million for the 2004 quarter.

Wall Street expected revenue of $179 million, according to analysts polled by Reuters Estimates.

DreamWorks also forecast fiscal year earnings of $1 to $1.25 per share, with most of that total coming in the fourth quarter.

Analysts, on average, expected $1.86 per share for the fiscal year, according to Reuters Estimates.

The company said it recorded no revenue from DVD and home video sales of "Shrek 2" in the quarter, despite the film's huge box office success.

Although "Shrek 2" appears on track to become the biggest selling video of all time, retail sales for first quarter did not meet expectations as revenue was less than costs for the distributor in the quarter, Chief Financial Officer Kris Leslie told analysts on a conference call.

Revenues for "Shrek 2" in the first quarter were offset by a higher level of returns from retailers than expected.

"Shrek 2" generated some revenue in the first quarter from licensing and merchandising, the company said.

Chief Executive Jeffrey Katzenberg (search) said in a statement that the film's "blockbuster characteristics" caused the company to "overestimate first-quarter retail sales."

The company reported quarterly revenue of $142 million from domestic home video and international box office sales for "Shark Tale." With $365 million in worldwide sales, the film has now beat the company's previous estimate of $350 million, DreamWorks said.

DreamWorks shares fell 14 percent in after-hours trade on Inet to $31.29 after closing at $36.50 Tuesday on the New York Stock Exchange.