Greetings all from the Geek Labs with another small tidbit of news
LOS ANGELES (Reuters) - Pixar Animation Studios Inc. (Nasdaq
IXR - news) claimed the mantle as world's top animated film maker from Walt Disney Co. on Wednesday after posting record quarterly income from runaway DVD sales of "Finding Nemo."
Chief Executive Steve Jobs (news - web sites) made clear his company's relationship with Disney would end when their distribution deal ran out in 2005, calling Disney's latest animated films duds and its sequels embarrassing.
"We think the Pixar brand is now the most powerful and trusted brand in animation," Jobs said on a conference call.
"Some people are disquieted by change, but we feel very, very strongly that Pixar is on the right track and the best days are yet to come," he said.
Fourth-quarter net income rose to $83.9 million, or $1.44 a share, from $17 million or 31 cents, in the year-ago quarter, topping the Wall Street consensus estimate of $1.27 per share, according to Reuters Research, a unit of Reuters Group Plc.
Revenue jumped to $164.8 million from $39.4 million, driven by video sales and foreign box office for computer-animated hit "Nemo," and Pixar shares rose 1.5 percent in after-hours trade after swinging widely.
San Francisco Bay area Pixar forecast first-quarter earnings of about 30 cents per share, far below the Wall Street consensus of 57 cents, but analysts said Pixar had an extremely conservative track record of projections and that executives gave no signs of trouble on the earnings horizon.
Analysts generally view Pixar as a blue chip creative franchise but differ on what is a fair valuation for shares.
"Here is a company that makes one film a year that costs around $100 million to make and generates approximately $500 million in pretax income. Does it get much simpler than that?" asked Harris Nesbitt Gerard analyst Jeff Logsdon, who rates the shares outperform.
Fish story "Finding Nemo" was the top U.S. film at the box office last year and has $850 million in total ticket sales to date, making it the ninth-biggest draw worldwide ever. By the end of the year, it sold 24.8 million home videos and DVDs.
TALKS WITH STUDIOS TO START IN MARCH
Jobs said that he would start talks next month with studios hoping to replace Disney and that he aimed by the fall to seal a distribution deal starting in 2006.
Jobs also made clear that he would not resume talks with Disney, calling it very unlikely and referring bitterly to Disney Chief Executive Michael Eisner. He said he had been told that Eisner expected "Nemo" to be less than a runaway success.
"Things turned out a little different," he said, praising the "original" spirit of Disney and studio chief Cook.
He went on to say recent Disney animated sequels were "pretty embarrassing" and animated features, "Treasure Planet" and "Brother Bear" had bombed. Disney took a substantial charge for "Planet" in 2002, but "Bear," with $84.5 million in domestic sales, is seen as a modest success.
The talks broke down when Disney declined to give Pixar ownership of future films, including the two left in the current contract, Jobs said.
Disney spokeswoman Zenia Mucha in a statement said that Jobs had "grossly mischaracterized good-faith negotiations."
"It's also sad and unfortunate that he has resorted to insults and name-calling in the wake of the disagreement. We expected better of him," she added.
Pixar executives said they expected to get 100 percent of the profit from films starting in 2006, after paying a distribution fee, expected by analysts to be under 10 percent.
Jobs said all the major Hollywood studios had called and that at least four could distribute as well as Disney. He then named films by three studios, Time Warner Inc. (NYSE:TWX - news). unit Warner Bros., Fox Entertainment Group Inc.'s (NYSE:FOX - news) 20th Century Fox and Sony Corp (news - web sites).'s (6758.T) Sony Pictures Entertainment.
Banc of America analyst Michael Savner, who rates Pixar shares sell on valuation concerns, said that by leaving Disney, Pixar effectively would lose potential upside from sequels and gain a competitor, even though it would get full control of its films starting in 2006.
"The negative implications of ending talks with Disney outweigh the potential positives," he said.
Shares of Pixar had risen about 15 percent from a year ago but were down 7 percent in the last month. They traded at $64.53 in after hours trade on Instinet after swinging widely from a close of $63.54 on the Nasdaq. (Additional reporting by Bob Tourtellotte in Los Angeles)
LOS ANGELES (Reuters) - Pixar Animation Studios Inc. (Nasdaq
IXR - news) claimed the mantle as world's top animated film maker from Walt Disney Co. on Wednesday after posting record quarterly income from runaway DVD sales of "Finding Nemo." Chief Executive Steve Jobs (news - web sites) made clear his company's relationship with Disney would end when their distribution deal ran out in 2005, calling Disney's latest animated films duds and its sequels embarrassing.
"We think the Pixar brand is now the most powerful and trusted brand in animation," Jobs said on a conference call.
"Some people are disquieted by change, but we feel very, very strongly that Pixar is on the right track and the best days are yet to come," he said.
Fourth-quarter net income rose to $83.9 million, or $1.44 a share, from $17 million or 31 cents, in the year-ago quarter, topping the Wall Street consensus estimate of $1.27 per share, according to Reuters Research, a unit of Reuters Group Plc.
Revenue jumped to $164.8 million from $39.4 million, driven by video sales and foreign box office for computer-animated hit "Nemo," and Pixar shares rose 1.5 percent in after-hours trade after swinging widely.
San Francisco Bay area Pixar forecast first-quarter earnings of about 30 cents per share, far below the Wall Street consensus of 57 cents, but analysts said Pixar had an extremely conservative track record of projections and that executives gave no signs of trouble on the earnings horizon.
Analysts generally view Pixar as a blue chip creative franchise but differ on what is a fair valuation for shares.
"Here is a company that makes one film a year that costs around $100 million to make and generates approximately $500 million in pretax income. Does it get much simpler than that?" asked Harris Nesbitt Gerard analyst Jeff Logsdon, who rates the shares outperform.
Fish story "Finding Nemo" was the top U.S. film at the box office last year and has $850 million in total ticket sales to date, making it the ninth-biggest draw worldwide ever. By the end of the year, it sold 24.8 million home videos and DVDs.
TALKS WITH STUDIOS TO START IN MARCH
Jobs said that he would start talks next month with studios hoping to replace Disney and that he aimed by the fall to seal a distribution deal starting in 2006.
Jobs also made clear that he would not resume talks with Disney, calling it very unlikely and referring bitterly to Disney Chief Executive Michael Eisner. He said he had been told that Eisner expected "Nemo" to be less than a runaway success.
"Things turned out a little different," he said, praising the "original" spirit of Disney and studio chief Cook.
He went on to say recent Disney animated sequels were "pretty embarrassing" and animated features, "Treasure Planet" and "Brother Bear" had bombed. Disney took a substantial charge for "Planet" in 2002, but "Bear," with $84.5 million in domestic sales, is seen as a modest success.
The talks broke down when Disney declined to give Pixar ownership of future films, including the two left in the current contract, Jobs said.
Disney spokeswoman Zenia Mucha in a statement said that Jobs had "grossly mischaracterized good-faith negotiations."
"It's also sad and unfortunate that he has resorted to insults and name-calling in the wake of the disagreement. We expected better of him," she added.
Pixar executives said they expected to get 100 percent of the profit from films starting in 2006, after paying a distribution fee, expected by analysts to be under 10 percent.
Jobs said all the major Hollywood studios had called and that at least four could distribute as well as Disney. He then named films by three studios, Time Warner Inc. (NYSE:TWX - news). unit Warner Bros., Fox Entertainment Group Inc.'s (NYSE:FOX - news) 20th Century Fox and Sony Corp (news - web sites).'s (6758.T) Sony Pictures Entertainment.
Banc of America analyst Michael Savner, who rates Pixar shares sell on valuation concerns, said that by leaving Disney, Pixar effectively would lose potential upside from sequels and gain a competitor, even though it would get full control of its films starting in 2006.
"The negative implications of ending talks with Disney outweigh the potential positives," he said.
Shares of Pixar had risen about 15 percent from a year ago but were down 7 percent in the last month. They traded at $64.53 in after hours trade on Instinet after swinging widely from a close of $63.54 on the Nasdaq. (Additional reporting by Bob Tourtellotte in Los Angeles)
