Pixar Has Happy Quarterly Ending

Baldwin Louie — Thu, 09 Aug 2001 15:00:00 -0700

Digital animation studio Pixar offered a short-but-sweet earnings announcement Thursday that provided a welcome fillip of good news during a harried results season that has been characterized by dour outlooks.

The Emeryville, Calif.-based company, which scored its first big hit with Toy Story in 1995, posted earnings of $8.75 million (17 cents a share), handily topping First Call consensus estimates of 13 cents a share.

Pixar's shares, which see an average daily trading volume of 240,000 per day, closed down 6 cents, or 0.15 percent, to $40.30 during the regular session. The announcement lifted the issue in the after-hours market, pushing Pixar as high as $42.88.

The company also raised its fiscal 2001 earnings per share estimate to between 50 cents and 58 cents, from the earlier range of 40 cents to 55 cents. Pixar CFO Ann Mather said third-quarter earnings per share would be 8 cents to 10 cents, depending on the strength of TV licensing, merchandising and software sales.

Led by Chairman and CEO Steve Jobs and creative director John Lasseter, Pixar is gearing up for the November release of its fourth feature film, Monsters, Inc. The movie will be the first directed by Lasseter protege Pete Docter for the studio. The studio's previous three films, Toy Story, A Bug's Life and Toy Story 2, which were distributed by Disney, all grossed more than $350 million in worldwide box office revenue and continue to generate revenue in video sales and merchandising .

With Monsters, Inc., Pixar is going after the same audience that helped propel DreamWorks' Shrek to box office numbers higher than either Toy Story or A Bug's Life. CEO Jobs said in a conference call after the earnings announcement that the film will have the biggest marketing campaign of any Disney-distributed movie. And with more than $175 million in cross-product promotions with companies such as Pepsi, Kraft, McDonald's and Wal-Mart, Pixar is making late October and November out to be all monsters, all the time.

For the current quarter, Pixar attributed the earnings surprise to lower-than-expected operating costs and the licensing of A Bug's Life to Disney's ABC television network. The company turned 52.3 percent of its $16.7 million in revenue into net income.

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Pixar Has Happy Quarterly Ending