YOU ARE HERE: LAT HomeCollections


Posting a Profit, Pixar Trumpets Pact With THQ

The firm prepares for a life without Disney -- as sales from one of their hits boosts Pixar's quarterly earnings.

August 06, 2004|Claudia Eller | Times Staff Writer

In announcing another hugely profitable quarter Thursday, Pixar Animation Studios underscored how it was preparing for possible life beyond Walt Disney Co. following the dissolution of the companies' longtime marriage.

Pixar said it had struck a new interactive games deal with publisher THQ Inc. for its first four wholly-owned movies that will be produced outside its existing partnership with Disney beginning in 2006.

"We're being very thorough to prepare for a new partnership," Pixar President Ed Catmull said. Beyond the issue of which studio will distribute Pixar's future movies, Catmull said there were other "building blocks" just as important to his company's future, including merchandising and other partnerships.

"As evidenced by today's announcement, we're putting these pieces in place," Catmull said.

The Pixar president also took the opportunity to reassure Wall Street that company founder Steve Jobs was making a successful recovery from his pancreatic cancer surgery and was expecting to return to work in September.

"He's doing great," said Catmull, who along with Pixar's creative guru, director John Lasseter, had just visited Jobs. "He was cracking jokes and gave us the distinct impression that he'd be firing off a lot of e-mails from his Powerbook over the next month."

When asked about the timing of landing a new distribution partner, Simon Bax, Pixar's new executive vice president and chief financial officer, reiterated Jobs' oft-stated position that while the company was in no hurry, it hoped to do so within the next 18 months -- well before the release of its first non-Disney movie, "Ratatouille."

Pixar's next two pictures, "The Incredibles" and "Cars," will be released by Disney under the existing deal. Pixar's first self-financed production will be "Ratatouille," about a rat who lives in a Paris restaurant, and is expected to be released in late 2006.

In January, after more than 10 months of fractious negotiations to try to extend the lucrative, 12-year relationship with Disney under dramatically altered financial terms that included giving Pixar full ownership of its movies, Jobs abruptly ended talks.

The Pixar-Disney marriage, though strained, produced five films, all of them hits: "Finding Nemo," "Monsters, Inc.," "A Bug's Life" and two "Toy Story" movies.

It was the continued success of Pixar's 2003 smash, "Finding Nemo," particularly in worldwide home video sales, that sent the company's second-quarter profit soaring. "Our results were well ahead of expectations," said Bax, who hosted Thursday's earnings call with Catmull.

Net income for the quarter ending July 3 rose to $37.4 million, or 63 cents a share, from $19.5 million, or 34 cents, in the year-ago quarter. Revenue was $66.3 million, compared with $48.9 million.

Pixar shares closed Thursday at $66, down $2.46, on Nasdaq.

Los Angeles Times Articles