Strong sales in DVDs and digital distribution were not enough to keep Image Entertainment Inc. from a drop in its third quarter net income when compared to a year ago.

The Chatsworth-based home entertainment distributor and producer reported net income of $763,000, or $0.00 per diluted share, on revenues of $34.5 million in the quarter ending Dec. 31. That is a 45 percent drop from the same period in 2010 when Image reported net income of $1.4 million, or $0.01 per diluted share, on revenues of $27.7 million.

Digital and broadcast revenues met expectations of the company’s senior executives while DVD and Blu-ray sales exceeded projections.

“Our digital distribution revenue and broadcast revenue have both significantly increased over the same quarter last year and we look forward to that continuing,” Image Chairman and CEO Ted Green said in a prepared statement.

DVD and Blu-ray sales increased to $27.9 million in the third quarter from $25.2 million in the same period a year ago.

Digital distribution went up to $4.3 million in the third quarter from $1.1 million, and broadcast revenues went up to $1.6 million in the third quarter from $1.1 million in the third quarter of the prior year.

Mark R. Madler