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LOS ANGELES - DreamWorks SKG is finally living up to the reputation of its founders.

Four years after being formed by three of the most powerful people in Hollywood - director Steven Spielberg, former Walt Disney executive Jeffrey Katzenberg and music mogul David Geffen - the company has its first big hits. "Saving Private Ryan" has taken in $126 million in the U.S. and Canada in four weeks, while "Deep Impact" has grossed $305 million worldwide.

After DreamWorks' much ballyhooed debut - its founding was front-page news in The New York Times - the three partners quickly discovered how difficult it can be to build a studio from the ground up, even with the financial support of Seattle billionaire Paul Allen. Its first movies were box-office disappointments. Now, though, it's picking up momentum with a well-tested formula: a big-budget action movie and a Spielberg film.

DreamWorks, moreover, has more promising movies in its pipeline, analysts say. The studio recently pushed up the release date for its animated "Antz" to October from next March, putting the movie about a colony of ants ahead of the November release of "A Bug's Life" from Walt Disney and Pixar.

DreamWorks is attacking Disney's bread-and-butter animation business on other fronts as well. The company will release "The Prince of Egypt," the story of Moses, in December, in time for the holiday season.

"The tide is turning for DreamWorks," said analyst Barry Hyman of Ehrenkrantz King Nussbaum. "If they want to be a major power, they need a few strong films in a row, and this gets them off to a good start."

The threesome have something else going for them: a track record of making money.

Spielberg has directed some of the biggest hits in Hollywood history, from "Jaws" to "Jurassic Park." Geffen, known as a master dealmaker, has built three successful record companies from scratch and amassed a billion-dollar fortune along the way, while dabbling successfully in Broadway productions on the side. Katzenberg, meanwhile, was the hyperactive Disney studio executive who, with Chairman Michael Eisner and Vice Chairman Roy Disney, helped revive the once-sleepy studio.

The lackluster performance of DreamWorks' first movies led some analysts and industry executives to question the company's ability to become a major force in Hollywood.

Starting a new studio "is one of the most daunting challenges imaginable, even if you have a Steven Spielberg," said Robert Broadwater, entertainment analyst at investment banking firm Veronis, Suhler & Associates. "There hasn't been a single successful story of a real studio being started in lots of decades."

DreamWorks' first movie, "The Peacemaker," which cost about $65 million to produce and market, took in $41 million domestically, while the critically acclaimed "Amistad" grossed just $44 million.

And without a big film library that can generate recurring revenue from the sale of titles to broadcast and cable-TV networks and home video, the new studio is bound to lose money for a long time.

Still, DreamWorks is teaming up with some of the more established studios to help finance its films, including partnerships with Viacom on "Saving Private Ryan" and "Deep Impact," and with Seagram's Universal Studios on "Small Soldiers." Those agreements allowed DreamWorks to limit its investment and risk if the movies underperform.

DreamWorks, for example, is distributing "Deep Impact" overseas, while Paramount is distributing the film in the U.S. and Canada. The studios will share what's left of box-office revenue after theaters take their roughly 50 percent cut.

Closely held DreamWorks still isn't churning out nearly as many movies as some of its rivals. This year, it will release about six films, less than half that of Paramount and barely one-fifth of the slate at Time Warner's Warner Bros., according to Exhibitor Relations.

"DreamWorks has been emphasizing quality over quantity. That means there's a little more pressure to deliver," said Tom Borys of ACNielsen EDI, which provides box-office data and analysis.

DreamWorks' domestic market share now stands at 5.3 percent, putting it ahead of some of its more established rivals, including Universal and Metro-Goldwyn-Mayer.

Microsoft co-founder Allen, meanwhile, recently boosted his stake in the company to 24 percent by buying half the shares owned by Korean firm Cheil Jedang.

With all that going its way, DreamWorks better hope the hits keep on coming.