Lionsgate Swings a Profit in Q3, Tops Wall Street Predictions

Andrew Klips |

Twilight Breaking DawnShares of Lionsgate Entertainment Corp. (LGF) rose by more than 3 percent during regular trading hours on Monday and tacked-on another 1.7 percent in extended trading action to $20.08 after the film maker handily beat Wall Street expectations as the latest iteration of the “Twilight” series help boost sales.

In its third quarter of fiscal 2013 ended December 31, reported revenue of $743.65 million, up 130 percent from $323.03 million in the year prior quarter.  Net income for the quarter totaled $37.8 million, or 27 cents per share, compared with a net loss of $1.4 million, or 1 cent per share in the third quarter of fiscal 2012.

Analysts were only anticipating earnings of 17 cents per share on sales of $720 million.

"The quarter reflected not only the impact of our young adult franchises but strong contributions from the rest of our theatrical releases and our home entertainment and international operations," said Jon Feltheimer, chief executive at Lionsgate.

Headquartered in Vancouver, British Columbia and operating from Santa Monica California, Lionsgate reaped some strong benefits during the quarter from its $412-million acquisition of Summit Entertainment in January of 2012.  Notably, the deal brought the “Twilight” franchise, as well as “Sinister,” to the company.

Shares of Lionsgate were trading in the area of $8.50 when it made the move to buy Summit.

Total motion picture revenue jumped 189 percent in the third quarter to $673.5 million.  Amid that, sales at theaters increased from $8.4 million in Q3 fiscal 2012 to $192.9 million in the latest quarter, led by revenue from “The Twilight Saga:  Breaking Dawn Part 2.”  Total box office sales for the latest installment of “Twilight” have exceeded $825 million globally.  The film is scheduled to be released to home entertainment (i.e. DVD, pay-per-view) on March 2, according to Lions Gate.

Lionsgate's home entertainment revenue from both motion pictures and television was $233.0 million in the third quarter, a 43% increase from the prior year quarter.  The company attributed a “diversified mix of titles” as the driving force for gains, including movies such as “The Expendables 2,” “Madea’s Witness Protection” and ongoing revenue from “The Hunger Games.”

“The Hunger Games:  Catching Fire” is slated to debut around Thanksgiving this year.

Further, the company said that its filmed entertainment backlog, meaning already contracted future revenue that has not yet been put on the books, was $1.2 billion at the end of the third quarter.

Shares of LGF are up more than 20 percent since the start of 2013 and currently sitting at all-time highs.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
IDF IDF n/a n/a n/a 0
LGF Lions Gate Entertainment Corporation 19.99 -0.32 -1.58 3,152,513

Comments

Emerging Growth

Beleave Inc.

Beleave Inc is a biotech company. The Company is engaged in the production of medical marijuana under the Marihuana for Medical Purposes Regulations outlined by Health Canada.

Private Markets

8tracks

Our mission is to be the best place for people who care about music to create and discover thoughtfully curated playlists. In essence, 8tracks is a platform for online mixtapes.

Snapwire

A peer-to-Peer authentic photo marketplace disrupting the $10B commercial photography industry.