As Buzz Lightyear would tell his cowpoke buddy Woody, Pixar (NASDAQ:PIXR) isn't flying. It's falling with style. At least that's one way to look at the animation studio's June quarter results, which don't look so hot at first glance. Revenue fell by 60% to hit $26.4 million. Earnings clocked in 69% lower at $0.10 per share.

Ouch!

Then again, it's important to photograph Pixar with a wider lens. Because the company has been producing just one major release every 18 months, quarter-to-quarter comparisons are bound to be funky. Even stacking up one year against another can be a fruitless task. However, for those who insist on holding Pixar to conventional reporting standards, 2005 looks pretty good when you lump the first two quarters together. Pixar has earned $0.77 a share on $187.7 million in revenue so far in 2005. That's a marked improvement from the $0.55 a share in profits and $120.1 million in revenue the company produced through the first half of 2004.

The only real disappointment came last month when the company warned that it was likely to earn a dime per share this quarter. Having guided investors to originally expect June quarter earnings to come in at $0.15 a share, it was the first time in ages that the company failed to deliver an upside earnings surprise.

So where does Pixar go from here? Shares have risen by 55% since they were first recommended in April 2003 in our Motley Fool Stock Advisor newsletter service, and its future is promising. Next summer, the company will be teaming up with Disney (NYSE:DIS) to release Cars. After that, Pixar is free to fully finance -- and fully profit from -- its new features. There may still be a chance that Disney and Pixar can come together to broker a distribution deal (or a production deal on sequels).

Computer animation is a crowded sector these days. DreamWorks Animation (NYSE:DWA) is the other notable pure player, but News Corp. (NYSE:NWS) and Time Warner (NYSE:TWX) also released computer animated features over the past year.

That doesn't mean that quality won't find an eager audience. Pixar is six-for-six in appealing to the mainstream -- we'll address the company's inevitable turkey when we get there. Until then, Pixar is looking sharp and is even upping its production schedule to release an animated feature every summer.

The cash-rich company closed out the period with a whopping $7.30 a share in cash and investments on its balance sheet. That certainly gives Pixar more breathing room than its leveraged rivals. Let's just hope it doesn't make it any less hungry.

Some more digitally rendered takes:

Pixar and Time Warner are Motley Fool Stock Advisor picks. Subscribe to check out what else David Gardner likes these days.

Longtime Fool contributor Rick Munarriz owns all of the Pixar releases on DVD. Yes, he owns shares of Pixar too -- and Disney. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.