Interesting statement by Jobs--that they're waiting to see who the new CEO is before picking a new studio.
Pixar profit down but tops Wall Street target
By Gina Keating, Reuters
LOS ANGELES, Feb 10 (Reuters) - Pixar Animation Studios Inc on Thursday posted lower fourth-quarter earnings but still topped Wall Street targets with its hit "The Incredibles" and said it would not help Walt Disney Co make sequels of the films produced under their partnership.
Pixar Chief Executive Steve Jobs also said Pixar probably would wait until Disney names a new chief executive to replace the departing Michael Eisner before picking a new distribution partner.
Shares of Pixar rose 1.5 percent in after-hours trade.
Net earnings fell to $55.2 million or 91 cents per share, from $83.9 million or $1.44 per share in the year-ago quarter when Pixar posted record income from DVD sales of "Finding Nemo."
The Emeryville, California computer animation studio said revenue for the fourth quarter of 2004 declined to $108.9 million, from $164.8 million a year earlier.
Profit and revenue easily topped Wall Street forecasts, as usual for the company.
"The numbers are very good, obviously way ahead of what we had expected," Jeffries & Co. analyst Rob Routh said.
Jobs told investors on a conference call that Pixar "likely...will not forge a new relationship with Disney beyond our current deal," but did little to clear up uncertainty about where the company's search for a new distributor would lead.
Pixar's partnership with Disney expires with the June 9, 2006, release of its seventh film, "Cars," and it must have a new distributor in place before its eighth film is released in summer of 2007.
"We clearly have slowed down the process of picking a new partner to see how this game of musical chairs will end and who the new CEO of Disney will be," Jobs said. "That could be somebody from another studio which could affect the desirability of another studio in our eyes."
Pixar further distanced itself from Disney by ruling out a role in making sequels to "Monsters, Inc" and "Finding Nemo," and Jobs said the company would not allow its brand to be used in marketing the new films.
Jobs previously had said that Pixar stood to make more money developing new projects it owned fully rather than developing sequels with Disney, which would require Pixar to share earnings and spread its resources thin.
Analysts disagreed over whether the moves showed Pixar's true intentions toward Disney, whose chief executive, Eisner, has publicly feuded with Jobs.
"(Jobs) clearly just continues to show no love to the folks at Disney and Disney continues to take pot shots at Pixar," Sanders Morris Harris analyst David Miller said.
Analyst Routh viewed Jobs' comments less as a rejection of Disney than a negotiating tactic. "I continue to believe if the right deal could be struck that Pixar would like to stay with Disney," Routh said.
The company also said it expected to see earnings per share of 85 cents to 95 cents for the first quarter of its first quarter of fiscal 2005, but declined to give further guidance.
Analysts were disappointed that Pixar did not give an earnings projection for the full year.
Chief Financial Officer Simon Bax said Pixar expected to generate steady revenue throughout the coming fiscal year from its library titles, which generated 25 percent of its fiscal year 2004 revenue, and from the worldwide DVD release of "The Incredibles."
Bax also said the company expected profit margins to improve as more consumers switched to DVDs from video tapes, which are more expensive to manufacture.
Bax said strong foreign currencies boosted dollar-denominated box office for "The Incredibles" by about 10 percent.
Pixar has no debt and $855 million in cash and investments. Jobs said he had no immediate plans to return a portion of the cash to investors.
"One of the great things having some cash and no debt affords you is options," he said.
Shares of Pixar rose $1.37 or 1.5 percent to $91.25 on Inet in after hours trade.
02/11/05 03:57 ET
Pixar profit down but tops Wall Street target
By Gina Keating, Reuters
LOS ANGELES, Feb 10 (Reuters) - Pixar Animation Studios Inc on Thursday posted lower fourth-quarter earnings but still topped Wall Street targets with its hit "The Incredibles" and said it would not help Walt Disney Co make sequels of the films produced under their partnership.
Pixar Chief Executive Steve Jobs also said Pixar probably would wait until Disney names a new chief executive to replace the departing Michael Eisner before picking a new distribution partner.
Shares of Pixar rose 1.5 percent in after-hours trade.
Net earnings fell to $55.2 million or 91 cents per share, from $83.9 million or $1.44 per share in the year-ago quarter when Pixar posted record income from DVD sales of "Finding Nemo."
The Emeryville, California computer animation studio said revenue for the fourth quarter of 2004 declined to $108.9 million, from $164.8 million a year earlier.
Profit and revenue easily topped Wall Street forecasts, as usual for the company.
"The numbers are very good, obviously way ahead of what we had expected," Jeffries & Co. analyst Rob Routh said.
Jobs told investors on a conference call that Pixar "likely...will not forge a new relationship with Disney beyond our current deal," but did little to clear up uncertainty about where the company's search for a new distributor would lead.
Pixar's partnership with Disney expires with the June 9, 2006, release of its seventh film, "Cars," and it must have a new distributor in place before its eighth film is released in summer of 2007.
"We clearly have slowed down the process of picking a new partner to see how this game of musical chairs will end and who the new CEO of Disney will be," Jobs said. "That could be somebody from another studio which could affect the desirability of another studio in our eyes."
Pixar further distanced itself from Disney by ruling out a role in making sequels to "Monsters, Inc" and "Finding Nemo," and Jobs said the company would not allow its brand to be used in marketing the new films.
Jobs previously had said that Pixar stood to make more money developing new projects it owned fully rather than developing sequels with Disney, which would require Pixar to share earnings and spread its resources thin.
Analysts disagreed over whether the moves showed Pixar's true intentions toward Disney, whose chief executive, Eisner, has publicly feuded with Jobs.
"(Jobs) clearly just continues to show no love to the folks at Disney and Disney continues to take pot shots at Pixar," Sanders Morris Harris analyst David Miller said.
Analyst Routh viewed Jobs' comments less as a rejection of Disney than a negotiating tactic. "I continue to believe if the right deal could be struck that Pixar would like to stay with Disney," Routh said.
The company also said it expected to see earnings per share of 85 cents to 95 cents for the first quarter of its first quarter of fiscal 2005, but declined to give further guidance.
Analysts were disappointed that Pixar did not give an earnings projection for the full year.
Chief Financial Officer Simon Bax said Pixar expected to generate steady revenue throughout the coming fiscal year from its library titles, which generated 25 percent of its fiscal year 2004 revenue, and from the worldwide DVD release of "The Incredibles."
Bax also said the company expected profit margins to improve as more consumers switched to DVDs from video tapes, which are more expensive to manufacture.
Bax said strong foreign currencies boosted dollar-denominated box office for "The Incredibles" by about 10 percent.
Pixar has no debt and $855 million in cash and investments. Jobs said he had no immediate plans to return a portion of the cash to investors.
"One of the great things having some cash and no debt affords you is options," he said.
Shares of Pixar rose $1.37 or 1.5 percent to $91.25 on Inet in after hours trade.
02/11/05 03:57 ET
