Video Sales Drive Pixar Third-Quarter Profit12 Nov, 2004 By: Erik Gruenwedel
Continued strong worldwide home video and related product sales of Finding Nemo and Monsters, Inc. contributed $22.8 million and $12.1 million, respectively, to help Pixar Animation Studios post third-quarter (ended Oct. 2) net income of $22.4 million, or 38 cents per diluted share, compared to earnings of $13.2 million, or 23 cents per share, during the same period last year.
Emeryville, Calif.-based Pixar reported quarterly revenue of $44.5 million, compared to $30.2 million during the same period last year.
Unit sales of Monsters, Inc. topped 35 million (53 percent DVD) and 44.3 million units for Nemo (75 percent DVD). Nemo unit sales are expected to reach 46 units by the end of the year, according to Pixar.
“The continued ramp-up of DVD hardware penetration rates with consumers globally is driving higher DVD unit sales, and that trend will further drive Pixar earnings power going forward," said Credit Suisse First Boston on Forbes.com.
In an investor call, Pixar CEO Steve Jobs said the studio is contemplating changing release schedules of future theatrical releases to the summer and all home video releases in the holiday season.
Alluding to the increase in theatrical foot traffic from kids out of school, Jobs said midweek summer ticket sales drove 33 percent of Nemo's box office revenue compared to the holiday release of Monsters, Inc., which had 23 percent of its box office revenue achieved midweek.
“The best time to release our films on video is clearly during the holiday season,” Jobs said. “By doing so, Pixar might realize million of dollars of additional profit per film.”
To achieve this scenario, Jobs said the studio would have to “slip” its theatrical release schedule by six months.
Any scheduling change would likely occur in 2006 following Pixar's scheduled fall 2005 theatrical release of Cars.