UPDATE 3-Pixar not hurrying in talks as profit triples
May 06, 2004 7:54:00 PM ET
By Peter Henderson
LOS ANGELES, May 6 (Reuters) - Pixar Animation Studios Inc. (PIXR) on Thursday reported that its quarterly profit more than tripled on the overseas success of blockbuster "Finding Nemo."
Pixar Chief Executive Steve Jobs said it might be as long as a year before the company reached a distribution deal for its film due in the holiday period of 2006, after its current contract with Walt Disney Co. (DIS) runs out.
Some analysts saw that as an indication Disney might still be in the running, if Chief Executive Michael Eisner left the company, although Jobs said he had not made such a statement.
Pixar's first-quarter net income rose to $26.7 million, or 46 cents per share, from $8.2 million, or 15 cents per diluted share, in the prior-year quarter, the San Francisco Bay Area company and creator of "Toy Story" and "Monsters, Inc." said.
Revenue rose to $53.8 million million from $18.7 million.
Analysts on average had expected Pixar to post earnings of 39 cents per share, far ahead of Pixar's forecast of 30 cents.
Chief Financial Officer Ann Mather set a target for second-quarter earnings of about 30 cents per share, below average Wall Street expectations of 51 cents, according to Reuters Research, a unit of Reuters Group Plc.
Pixar's five films have made $2.6 billion at the box office so far, a string of hits that has astounded Hollywood and investors, and "Nemo" is the highest-grossing animated feature ever, with more than $860 million in global ticket sales.
But the sharp run-up in stock price has divided analysts on whether the shares have become too richly valued.
Pixar also said it expected to sell a whopping 40 million DVD and home video units of fish tale "Nemo" by the end of 2004. It had earlier forecast total sales of 35 million units.
Pixar said some revenue from "Nemo" in the past quarter had come at the expense of later quarters, but analysts dismissed that as largely irrelevant to its prospects.
"I don't think the timing of home videos matters much," said SG Cowen analyst Lowell Singer, who has an $80 price target on the stock, which fell 19 cents to $66.06 in regular trade on Nasdaq and dropped by as much as $1 after hours on INET .
NO HURRY ON NEW DEAL
Pixar's success has put it in a position to negotiate a very good deal for its future films, analysts said.
Disney has rejected its terms and Pixar broke off talks earlier this year, but analysts said that turmoil at Disney, where Eisner is under pressure from some shareholders to resign, may play a part in Pixar's plan.
"My expectation is that Pixar is likely to wait to see what happens with Disney and its management team and does not want to box itself into a corner," said Banc of America analyst Michael Savner, who has a sell rating on Pixar due to its valuation.
Jobs himself said that talks with Hollywood suitors were in an early stage and might not conclude until mid-2005.
Pixar earlier this year said it would pull out of a distribution deal with Disney after "Cars," the seventh film produced together, debuts in the holiday season of next year.
Sanders Morris Harris analyst David Miller said he saw News Corp Ltd. studio 20th Century Fox and Time Warner Inc's (TWX) Warner Bros. in a dead heat as the leading contenders to distribute Pixar films, followed by Sony Corp. unit Sony Pictures Entertainment.
Pixar's shares are up more than 10 percent in the last year but down about 5 percent in the last six months.
Pixar's next film, "The Incredibles," a comedy about a family of superheroes, debuts on Nov. 5. REUTERS
May 06, 2004 7:54:00 PM ET
By Peter Henderson
LOS ANGELES, May 6 (Reuters) - Pixar Animation Studios Inc. (PIXR) on Thursday reported that its quarterly profit more than tripled on the overseas success of blockbuster "Finding Nemo."
Pixar Chief Executive Steve Jobs said it might be as long as a year before the company reached a distribution deal for its film due in the holiday period of 2006, after its current contract with Walt Disney Co. (DIS) runs out.
Some analysts saw that as an indication Disney might still be in the running, if Chief Executive Michael Eisner left the company, although Jobs said he had not made such a statement.
Pixar's first-quarter net income rose to $26.7 million, or 46 cents per share, from $8.2 million, or 15 cents per diluted share, in the prior-year quarter, the San Francisco Bay Area company and creator of "Toy Story" and "Monsters, Inc." said.
Revenue rose to $53.8 million million from $18.7 million.
Analysts on average had expected Pixar to post earnings of 39 cents per share, far ahead of Pixar's forecast of 30 cents.
Chief Financial Officer Ann Mather set a target for second-quarter earnings of about 30 cents per share, below average Wall Street expectations of 51 cents, according to Reuters Research, a unit of Reuters Group Plc.
Pixar's five films have made $2.6 billion at the box office so far, a string of hits that has astounded Hollywood and investors, and "Nemo" is the highest-grossing animated feature ever, with more than $860 million in global ticket sales.
But the sharp run-up in stock price has divided analysts on whether the shares have become too richly valued.
Pixar also said it expected to sell a whopping 40 million DVD and home video units of fish tale "Nemo" by the end of 2004. It had earlier forecast total sales of 35 million units.
Pixar said some revenue from "Nemo" in the past quarter had come at the expense of later quarters, but analysts dismissed that as largely irrelevant to its prospects.
"I don't think the timing of home videos matters much," said SG Cowen analyst Lowell Singer, who has an $80 price target on the stock, which fell 19 cents to $66.06 in regular trade on Nasdaq and dropped by as much as $1 after hours on INET .
NO HURRY ON NEW DEAL
Pixar's success has put it in a position to negotiate a very good deal for its future films, analysts said.
Disney has rejected its terms and Pixar broke off talks earlier this year, but analysts said that turmoil at Disney, where Eisner is under pressure from some shareholders to resign, may play a part in Pixar's plan.
"My expectation is that Pixar is likely to wait to see what happens with Disney and its management team and does not want to box itself into a corner," said Banc of America analyst Michael Savner, who has a sell rating on Pixar due to its valuation.
Jobs himself said that talks with Hollywood suitors were in an early stage and might not conclude until mid-2005.
Pixar earlier this year said it would pull out of a distribution deal with Disney after "Cars," the seventh film produced together, debuts in the holiday season of next year.
Sanders Morris Harris analyst David Miller said he saw News Corp Ltd. studio 20th Century Fox and Time Warner Inc's (TWX) Warner Bros. in a dead heat as the leading contenders to distribute Pixar films, followed by Sony Corp. unit Sony Pictures Entertainment.
Pixar's shares are up more than 10 percent in the last year but down about 5 percent in the last six months.
Pixar's next film, "The Incredibles," a comedy about a family of superheroes, debuts on Nov. 5. REUTERS
