Shares of DreamWorks Animation SKG Inc. surged Wednesday after an analyst upgraded the film studio on increased revenue from older movies in its library.

Michael Pachter of Wedbush Morgan Securities said in a client note that the revenue has helped offset some box-office and home-video softness.

While the Glendale, Calif.-based company's "Bee Movie" and "Shrek the Third" sales made up 62 percent of its first-quarter revenue, Pachter said older films also made significant contributions, including "Flushed Away," "Wallace and Gromit" and the original "Madagascar."

The analyst predicts quarterly library revenue will average more than $28 million for the rest of the year, but notes his forecast may be conservative.

Late Tuesday DreamWorks reported its first-quarter profit jumped 69 percent on international box office revenue from "Bee Movie" and DVD sales of "Shrek the Third."

Pachter lifted his full-year earnings-per-share estimate to $1.66 from $1.58 and boosted his sales forecast to $662 million from $604 million. He also increased his 2009 profit and revenue estimates.

The analyst raised DreamWorks' rating to "Buy" from "Hold" and lifted its price target to $33 from $28.

Shares of DreamWorks Animation SKG gained $2.22, or 8.6 percent, to close at $27.96 Wednesday. The stock has traded between $21.25 and $34.99 over the past year.