Pixar Packs a Punch
Updated from 5 p.m.
Pixar (PIXR) took investors' breath away late Tuesday, posting a much-stronger-than-expected third quarter.
The animation studio made $27.4 million, or 22 cents a share, compared with $22.4 million, or 19 cents, a year earlier, the Emeryville, Calif.-based company said in a statement. Sales rose 3% to $45.8 million.
"Our performance in the quarter highlights the ongoing value of our growing film library," CEO Steve Jobs said in a statement.The company was expected to earn 11 cents on sales of $30.6 million, according to analysts surveyed by Thomson Financial. Shares rose $2.02 to $52.90 late Tuesday. Jobs, who also runs Apple (AAPL), is reportedly interested in selling Pixar to partner Disney (DIS). Pixar has produced such hits as Toy Story and The Incredibles. Relations have warmed since the departure of former Disney chief Michael Eisner, though Disney has yet to make a formal offer, The New York Times said. Pixar said on its conference call that the sides are in "deep discussions," Reuters reported. Disney's hand in any possible negotiation may have been helped by the unexpectedly strong performance of its animated fable Chicken Little, the top-grossing film last weekend. Investors had worried that Disney was too dependent on Pixar for animated hits. Pixar's distribution agreement with Disney expires after the release of Pixar's Cars, the company's seventh film, due next spring. Jobs has said he wants a new distribution agreement for Pixar in place by the end of the year. In the earnings press release, Jobs predicted that people would like Cars. "It's going to take your breath away," he said.
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