Pixar Lowers Earnings Estimate on ‘Incredibles' Returns30 Jun, 2005 By: Kurt Indvik
Pixar Animation Studios today lowered its earnings estimates for the second quarter following a review of its most current domestic and international home video sales data for The Incredibles, which showed potential for greater returns than the studio originally estimated, according to a Pixar announcement and reports from the Associated Press.
The studio reduced its earnings per diluted share for the quarter ending July 2, 2005, from $0.15 to $0.10, which equates to approximately $6 million difference in net income, the company said.
“The Incredibles is the best-selling home video title of 2005 to date, and we continue to expect it to generate home video revenues similar to Monsters, Inc.” said Steve Jobs, Pixar CEO. “But based on the most recent sellthrough information, we have opted to be more cautious with respect to our second quarter home video reserves.”
Those reserves would be used to refund retailers in the event of returns.
The miscalculation follows a similar announcement recently by DreamWorks Animation SKG when, in May, the company missed its first quarter earnings estimates due to higher than anticipated returns on Shrek 2.