Troubled movie studio issues profit warning

Less than a year after going public on the strength of hit films such as Shrek, DreamWorks Animation SKG is battling a DVD market slump that forced it to warn of a loss in the second quarter and to lower its full-year outlook.

The US company, which badly missed first-quarter profit estimates due to disappointing revenue from home video sales of Shrek 2, also disclosed yesterday that it was the target of a securities probe into the trading of its stock and release of first-quarter results.