Which I'm not really confident will happen.... Well, on second thought, maybe I should be confident that management will beat. DreamWorks actually has a fine history of beating earnings estimates. You know what, though? It doesn't really matter, because we are in different times, fellow investors. The retail environment is so weak that I have no idea if the home-video release of Kung Fu Panda packed a punch as powerful as that of the title character (I've never seen the film, so I likewise have no idea if the panda actually did have a powerful punch or if his ability to do kung fu was all a joke). Make no mistake, DVD sales of Panda will make or break the quarter. It was released in early November of last year, in time to sell a lot of discs for the holiday. Or so CEO Jeffrey Katzenberg hopes. Madagascar: Escape 2 Africa won't be contributing much to the company coffers until sales of its DVD, released earlier this month, are tallied next reporting period. That's because the theatrical release has to recoup a lot of costs and expenses associated with distribution and marketing before it starts to reap a benefit.

Besides seeing how the Panda DVD fared in the marketplace, I'll also be very interested in seeing how much operational cash flow was generated for the year. At the end of the day, it's the cash flow that counts. I'd love to hear Katzenberg's thoughts on how his studio's library can best utilize the digital platforms to deliver long-term shareholder value. And let's not forget that DreamWorks has a new movie due next month, Monsters vs. Aliens. How is that tracking, and how does Katzenberg feel the movie will perform in terms of merchandising opportunities? And I love hearing about how the library titles are adding to the bottom line. As time goes on, library income will be an important supplement to the annual releases, even more so than it is currently.

I like DreamWorks' future prospects, but it's pretty difficult to want to buy anything right now. The company was fundamentally sound in Q3, posting nice earnings and cash flow. But I think the market is correct in assuming that a much weaker consumer is to be expected in the coming months. If that turns out to be the case, then a lower stock price for DreamWorks might be warranted, since movie companies base their profits mostly on DVD sales, merchandise, and digital distribution. Simply put, studios like Disney (NYSE: DIS), Time Warner (NYSE: TWX), News Corp. (NYSE: NWS), and Viacom (NYSE: VIA) have all had to put up with weakness in both their companies and their stocks. I would not be trading DreamWorks Animation before the release. If someone else profits by being braver than I could ever hope to be, so be it.

Disclosure: I own Disney; positions can change without notice.