Firm plans to self-finance starting in 2006
HOLLYWOOD — Regardless of who becomes its new distribution partner, Pixar plans to start self-financing its own films in 2006 after its contract with Disney ends.
CEO Steve Jobs told analysts in a conference call Wednesday that the move would more than double the percentage of box office and ancillary revenue the animation studio keeps from its releases. News came as the company reported that revenue nearly tripled in the first quarter due to the strong performance of “Finding Nemo” on homevideo, particularly in international markets.
“Starting in 2006 we expect to earn twice as much for the same amount of work,” he said.
Movies will be financed by Pixar’s own cash, which stood at $541 million at the end of the first quarter.
That means whichever studio ends up as Pixar’s partner won’t have to spend a penny on production but can expect a relatively low distribution fee in return.
Jobs said Pixar execs are continuing to have meetings with execs at a number of major studios, but it’s still in the “getting to know you” stage and he doesn’t expect a final decision for several months at least. He added that the final date to select a distributor would be 18 months before the release of the company’s first post-Disney pic, which means Hollywood may be waiting for a decision until as late as early 2005.
Execs from a number of studios, including MGM and Warner Bros., have already made public pitches as to why they would be the best fit for Pixar.
First-quarter revenue for Pixar was $53.8 million, up from $18.7 million a year ago. Net income was $26.7 million, more than three times last year’s $8.2 million. Outgoing chief financial officer Ann Mather said Pixar expects to sell 40 million units of “Finding Nemo” on DVD and video worldwide by the end of this year.
As video sales slow down, company expects diluted net earnings per share to decline from 46¢ in the first quarter to 30¢ in the second. Pixar declined to provide guidance for the full year as it will depend almost entirely on the performance of “The Incredibles,” to be released Nov. 5.
Pixar stock closed nearly unchanged at $66.06 Wednesday.