Updated from 5:06 p.m.

Pixar's

(PIXR)

first-quarter earnings soundly beating expectations, fueled by strong DVD sales for its latest hit,

The Incredibles

.

The Emeryville, Calif., animation studio run by

Apple

(AAPL) - Get Report

founder Steve Jobs posted first-quarter earnings of $81.9 million, or 67 cents per share, up from the year-ago profit of $26.7 million, or 23 cents a share. Revenue at the maker of

Toy Story

and

Finding Nemo

surged to $161.2 million from $53.8 million a year earlier.

Analysts polled by Thomson First Call had expected earnings of 47 cents per share on $116 million in revenue. Shares of Pixar rose 6% in postclose action.

"We're off to a terrific start with

The Incredibles

shaping up to be the best-selling DVD of 2005," said Jobs. "

Cars

is looking great, and we're also very excited about the 10-year anniversary re-release of

Toy Story

on DVD this fall."

Pixar's next release,

TheStreet Recommends

Cars

isn't due to hit theaters until June of 2006.

The Incredibles

now ranks as the second highest-grossing Pixar film after

Finding Nemo

.

In second quarter, the company will look forward to international revenue from

The Incredibles

as it is released in France, Germany and Japan on DVD. In the third quarter, domestic pay TV revenue should start flowing from

The Incredibles

. In the fourth quarter, Pixar expects to reap the benefits of the U.S. TV premiere of

Finding Nemo

.

Jobs said the company is "on track to finish

Cars

this October" and that two-thirds of the animation finished. He called it the most detailed computer-generated animated film ever made.

The other key topic of conversation is a new studio partner for Pixar, which owns its films jointly with

Disney

(DIS) - Get Report

, its current distributor. Pixar and Disney have enjoyed a somewhat rocky history and their distribution arrangment is coming to an end.

"I've had nice conversations with

Disney head Robert Iger, though we're not in negotiations," said Jobs, who later in the call indicated that the company would be negotiating "with studios in coming months." He expects to strike a new distribution deal by the end of the year. Jobs was a vociferous critic of Disney's lame duck chief, Michael Eisner, whose tenure is due to end in September.

Pixar said it is on track to produce one film per year starting in 2006 on a summer release schedule.

In after-market trading Thursday, Pixar shares rose $2.78 to $49.05.