Pixar Shares Fall on Report of SEC Probe
NEW YORK – Shares of Pixar Animation Studios Inc. (PIXR) fell nearly 2 percent Friday after a published report said the Securities and Exchange Commission (search) has requested information leading up to its report earlier this month of lower second-quarter earnings.
Pixar shares fell 82 cents, or 1.9 percent, to $42.18 on the Nasdaq Stock Market (search), where its shares have traded in a 52-week range of $36.56 to $54.47.
The Wall Street Journal reported Friday that the SEC launched an informal inquiry into Pixar after heavier-than-expected returns of "The Incredibles (search)" DVD led the studio to miss its second-quarter earnings forecast.
The story, citing unidentified people familiar with the case, said Pixar is cooperating with the SEC.
A call to the company, based in Emeryville, Calif., was not immediately returned.
On Aug. 4, Pixar reported it earned $12.7 million, or 10 cents per share, in the second quarter compared to $37.4 million, or 32 cents per share, a year earlier. Revenue fell to $26.4 million from $66.3 million.
In June, Pixar lowered its earnings estimates for the second quarter after finding that home video sales of "The Incredibles" were weaker than expected.
Upon reviewing sales data, the studio decided to increase its cash reserves in anticipation that it might have to refund retailers for unsold copies of the movie.
The company said at the time that the move would result in lowering net income in the quarter by 5 cents per share, or $6 million.