Pixar Earnings Down? Incredible!

    July 1, 2005
    WebProNews Staff

Despite being the best-selling home video title of the year so far, “The Incredibles” hasn’t hit high-flying sales expectations.

The updated earnings guidance provided yesterday by Pixar calls for lower net income for the current quarter. The five-cent change from 15 to 10 cents per share means a loss of $6 million USD.

Pixar Earnings Down? Incredible!

Pixar CEO Steve Jobs said: “(B)ased on the most recent sell-through information, we have opted to be more cautious with respect to our second quarter home video reserves.”

Those reserves cover returns of unsold copies of “The Incredibles” from retailers. Pixar seems to have made a similar miscalculation to that of DreamWorks, regarding home sales of its Shrek 2 movie.

Wholesale revenue from home video sales of “The Incredibles” is still expected to reach $450 million by the end of the second quarter, said Simon Bax, Pixar’s chief financial officer. Mr. Jobs also said the company expects sales of “The Incredibles” to reach those of “Monsters Inc.”

But if the new information had come during a quarter where a Pixar release was new to theaters, it probably wouldn’t have been an issue.

“The only reason $6 million is material enough is this is a low-revenue quarter,” Jobs said. “If that was last quarter where we earned 67 cents — 20 cents higher than expected — a $6 million issue would not have warranted an update at all. We would have only beaten our guidance by 15 percent instead of 20 percent.”

David Utter is a staff writer for WebProNews covering technology and business. Email him here.