Pixar Takes Aim at Disney

The movie animation studio posts an impressive fourth quarter as Steve Jobs goes on the offensive.
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Updated from Feb. 4

Pixar Animation Studios

(PIXR)

CEO Steve Jobs ripped into

Disney

(DIS) - Get Report

CEO Michael Eisner on Wednesday evening with all the intensity of an unrepentant shark.

Although professing some regret over Pixar's decision to end the company's distribution deal with Disney, Jobs made clear his disdain for Eisner and much of the rest of the Disney organization, and made it clear there was minimal chance of extending Pixar's current deal with Disney, under which Disney will distribute two more films over the next two years.

Jobs' comments, which came on a conference call with analysts, made it all but official that Pixar will have as little as possible to do with Disney over the coming years, and that one of the other four major studios in Hollywood will be distributing Pixar's future movies.

Thus, in coming years, Disney will have to look inward or elsewhere to duplicate the success it has enjoyed with Pixar, whose releases have been a major boost to Disney's bottom line.

Jobs' comments, which came as the company reported earnings for the fourth quarter ended Jan. 3, also add fuel to the fire already tended by disgruntled former Disney director Roy Disney, who is loudly complaining that Eisner has fallen down on the job of preserving the legacy of Roy's Uncle Walt.

Indicating his low regard for Disney's current creative output, Jobs told analysts, "We feel sick about Disney doing sequels" of Pixar-produced movies that the companies co-own, given Disney's recent sequels of

The Lion King

and

Peter Pan

. "It's pretty embarrassing."

Pixar's shares fell 66 cents Tuesday to close at $63.64, while Disney's shares fell 7 cents to $23.19.

Driven by the success of

Finding Nemo

, Pixar reported revenue of $164.8 million, ahead of the Thomson First Call consensus of $161 million. Diluted net income per share amounted to $1.44, ahead of the $1.26 expectation.

On the call, Jobs said that representatives of the other major studios had all called Pixar within the past five days regarding deals to distribute Pixar's movies. The company hopes to negotiate a successor agreement to the Disney relationship by the end of this year, Jobs said.

Jobs spoke highly of "the original spirit of Disney" and the company's marketing organization headed by Disney movie executive Dick Cook. But he discounted the company's creative efforts. "There has been little creative collaboration with Disney for years," Jobs said.

Indeed, Jobs opened up his comments about Disney by quoting a

Los Angeles Times

story reporting that, before

Finding Nemo

had been released, Eisner had told Disney's board he was not impressed with the movie. "We've been told the same story by several folks at Disney," Jobs said.

On Thursday, Pixar slipped $1.35 to $61.80.