Pixar reanimates profits
Pixar Animation Studios reports higher quarterly profits and raises earnings estimates for the year on the strength of its library, which includes past hits such as ?Monsters, Inc.?
Emeryville, Calif.-based Pixar said its second-quarter profit rose to $10.4 million, or 20 cents per share, from $8.8 million, or 17 cents per share, a year earlier. Revenue rose to $22.8 million from $16.7 million a year earlier.
Profit and revenue surpassed estimates of analysts polled by market researcher First Call, which had expected earnings of 8 cents to 17 cents per share, with a consensus forecast of 11 cents per share profit on revenue of $19.5 million.
The company, which had forecast earnings per share of 6 cents to 8 cents for the quarter, said the increase came largely from conservative forecasting and higher-than-expected licensing and merchandising revenue.
Pixar raised its earnings-per-share guidance for the full year to a range of $1.25 to $1.35 from its previous range of $1.15 to $1.25, and also initiated a forecast of earnings per share of 68 cents to 72 cents for this quarter.
The First Call estimate for the third quarter had been for earnings per share of 47 cents, with a range of 33 cents to 55 cents. For the full year the estimates had been for $1.28 per share, with a range of $1.23 to $1.34.
Pixar, whose chief executive officer is Apple Computer?s Steve Jobs, recently signed a deal with video-game publisher THQ and its producing partner, Walt Disney to produce video games based on its three upcoming films.
Those three films--summer 2003's ?Finding Nemo,? holiday season 2004's ?The Incredibles? and holiday season 2005's ?Cars?--are the last under Pixar's production deal with Disney.
The 50-50 partnership, under which Pixar makes the films and Disney distributes and markets them, dates to 1995, and has accounted for $1.7 billion in global ticket sales.
?Our relationship with Disney remains good; we have a very strong working relationship with a lot of folks at Disney,? Jobs said in a conference call.
?We certainly have received a lot of phone calls from lots of folks wanting to get to know us,? Jobs added. ?We have a lot of options.?
He said Pixar is not allowed to discuss production deals with other companies until it delivers ?Finding Nemo? to Disney, which he said would likely be around February.
Analysts on the call all said they were pleased with the quarter, though one did have an admonition for Jobs. ?Steve, just give Disney hell,? said Jeffrey Logsdon, an analyst at Gerard Klauer Mattison.
Though no deals are in place, Jobs said that the company will approve the start of production for its first post-Disney film by the end of this year.
Jobs said that film would debut some time after 2005. He also said Pixar would finance the film itself.
?We announced cash is $290-something million in the bank, so we certainly have enough money to do that,? he said.
Pixar is now in the process of preparing for a September launch of the DVD version of ?Monsters Inc.,? its latest animated hit, whose worldwide box-office revenue was more than $520 million.
That film will ship at $24.99 on VHS and $29.99 for a two-disc DVD set, with initial net unit shipments of 20 million to 22 million, Chief Financial Officer Ann Mather said on the call.
?DVDs are exploding, and so the video business is also pretty healthy right now, and we hope that the 'Monsters, Inc.' release takes advantage of those trends,? Jobs said.
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