Pixar Profit Climbs 70% in Quarter
Pixar Animation Studios Inc.'s third-quarter profit soared 70%, mainly because of the continued strength of DVD sales from last year’s blockbuster “Finding Nemo” and its earlier computer-generated films.
Thursday’s announcement that it earned $22.4 million, or 38 cents a share, on revenue of $44.5 million follows Pixar’s release of its sixth straight hit film, “The Incredibles.”
A year earlier, Pixar earned $13.2 million, or 23 cents a share, on revenue of $30.2 million.
Pixar Chief Executive Steve Jobs also disclosed for the first time that the Emeryville, Calif.-based animation studio was considering shifting its future films to open only in the summer, hoping to gain more box office when children were out of school. He added that Pixar also could boost sales of DVDs because they would be released during the holidays.
Other than “Finding Nemo,” which opened last summer, Pixar has released its films in theaters during the holidays, with DVDs debuting in the spring.
In an interview, Jobs acknowledged that the shift could mean Pixar might have to go an entire year without a film, a risky move for a company whose earnings are driven by movie releases and often fluctuate wildly between pictures.
Although Jobs declined to specify his exact plans, presumably any shift in Pixar’s release schedule would not affect “Cars,” due out next November.
Directed by “Toy Story” whiz John Lasseter, “Cars” is the last film to fall under Pixar’s longtime distribution partnership with Walt Disney Co.
Jobs said he was still biding his time about making a new distribution deal. In January, he abruptly ended talks with Disney to extend their partnership under a more financially advantageous arrangement.
Pixar intends to finance its own movies and retain its profit rather than split it with a studio as it currently does with Disney.
Jobs said that because Pixar didn’t need to make a decision until next year, he’d prefer to wait and see how the “musical chairs among the studios” would play out once a successor to Disney CEO Michael Eisner was named.
Many believe that Eisner’s eventual exit opens up the possibility of Pixar and Disney negotiating again.
“No conversations are taking place with Disney,” Jobs said. “We’re getting to know other studios but are not in negotiations with anyone.... We’re taking our time.”
Jobs dismissed some reports speculating that investors were disappointed in the $70.5-million opening for “The Incredibles,” a record for a Pixar film. He did acknowledge, however, that Warner Bros.’ computer-generated “The Polar Express,” which opened Wednesday, could cut into this weekend’s box-office totals for “The Incredibles.”
Before the opening of “The Incredibles” on Nov. 5, Pixar’s stock hit a record high of $84.45. But it fell 6% to $79.25 on Monday after the weekend box-office numbers were released.
Jobs attributed the swings to Wall Street’s mentality of wanting to “buy on the rumors, sell on the news.”
Pixar shares were up again Thursday, rising $2.68 to $79.94 on Nasdaq.