Looks like they are getting hit by the same DVD softness that hit Pixar a few weeks ago. The reasons seem pretty much the same too. DVD sales are slowing down for a reason that they can't understand. Since Dreamworks makes less movies then other outfits it hits their bottom line harder.
This article brings up the spectre of piracy by saying that the movie is pirated as soon as the movie starts its theatrical release. Then people just buy the pirated DVD for $5 instead of buying it from the store weeks later. I think this could be part of the problem but I think the market may be saturated by DVDs. This is a one buy item after all. Once you have the movie you don't need another one for any reason.
One theory I have is that cheap rentals (now without late fees) could be eating into DVD sales as well. The movie is sent right to their home without any muss or fuss. They can then rip the DVD if the movie is good enough to own. There is no reason to go to the store to buy the DVD when you can have it delivered right into the home.
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