Pixar Animation Studios Thursday lowered its earnings target for the current quarter to account for the possibility of higher-than-expected store returns of "The Incredibles" DVDs.
The animation studio cut its diluted earnings per share target for fiscal second quarter earnings to 10 cents from 15 cents. That translates to a difference in net earnings of about $6 million, the company said in a statement.
Pixar Chief Executive Steve Jobs said the company expected "The Incredibles," an animated tale of a superhero family, to generate home video revenues similar to that of "Monsters, Inc." "The Incredibles" is the best selling home video so far in 2005.
"But based on the most recent sell-through information, we have opted to be more cautious with respect to our second quarter home video reserves," Jobs said.
Jobs said separately on a conference call with analysts that talks with partner Walt Disney Co. on a possible new distribution deal had been "positive".
Rival DreamWorks Animation SKG Inc. stunned investors on May 10 by reporting that its first-quarter DVD sales for "Shrek 2" fell fall short of the company's earlier projections, which sent DreamWorks shares tumbling 12 percent the next trading day.
