Lions Gate Entertainment Q3 Profit More Than Doubles, Results Beat View

(RTTNews) - Lions Gate Entertainment Corp. (LGF) on Thursday reported a profit for the third quarter that more than doubled from last year, reflecting double-digit revenue growth. Both revenue and earnings per share for the quarter beat analysts' expectations.

The increase in revenue for the quarter was driven by the domestic and international box office performance of The Hunger Games: Catching Fire as well as contributions from domestic theatrical releases such as Ender's Game and A Madea Christmas, and strong international performances from Red 2, Escape Plan and Now You See Me.

Jon Feltheimer, Chief Executive Officer of Lionsgate said, "Our stellar results in the quarter were attributable to our operating performance, the favorable environment for content and the benefits from our strong balance sheet. We will continue to invest in content and embrace innovative models for licensing that content to digital and traditional platforms alike in order to build on this performance and create additional long-term value for our shareholders."

Santa Monica, California-based Lionsgate reported net income for the third quarter of $88.76 million or $0.59 per share, up from $37.83 million or $0.27 per share in the prior-year quarter.

The latest quarter's results include stock-based compensation of $7.60 million or $0.05 per share. Excluding items, adjusted net income for the quarter was $96.36 million or $0.63 per share, compared to $61.37 million or $0.43 per share in the year-ago quarter.

On average, twelve analysts polled by Thomson Reuters expected the company to earn $0.44 per share for the quarter. Analysts' estimate typically excludes one-time items.

Revenues for the quarter grew 13 percent to $839.94 million from $743.65 million in the same quarter last year, and beat analysts' consensus revenue estimate of $834.02 million.

The prior-year quarter' s results included loss on extinguishment of debt of $14.65 million.

Lionsgate noted that The Hunger Games: Catching Fire has grossed $860 million at the worldwide box office, a 25 percent increase over the first HungerGames film.

Motion picture revenue for the quarter increased 12 percent from the year-ago period to $757.6 million, reflecting the strong theatrical slate in the quarter.

Meanwhile, home entertainment revenue from both motion pictures and television decreased 14 percent to $200.7 million, as the three wide theatrical releases on home entertainment platforms in the quarter compared to a slate of six wide theatrical releases delivered to home entertainment platforms in the prior-year period.

Television revenue included in motion picture revenue increased 7 percent to $105.8 million, driven by titles such as The Twilight Saga: Breaking Dawn - Part 2, Warm Bodies, Sinister, Snitch and Temptation: Confessions of a Marriage Counselor.

International motion picture revenue, excluding Lionsgate U.K., surged 31 percent from the year-ago period to $117.1 million, as The Hunger Games: Catching Fire led a strong slate that also included Red 2, Escape Plan and Now You See Me. Lionsgate U.K. revenue grew 53 percent from last year to $55.9 million.

Television production revenues for the quarter increased 17 percent from the prior-year period to $82.3 million.

Lionsgate's filmed entertainment backlog, or already contracted future revenue not yet recorded, stood at $1.2 billion at the end of the third quarter.

During the quarter, Lionsgate declared its first quarterly dividend of $0.05 per common share. The dividend is payable on February 7, 2014 to shareholders of record as of December 31, 2013.

Lionsgate noted that the next two films in the HungerGames franchise, The HungerGames : Mockingjay Part 1 and The Hunger Games : Mockingjay Part 2 will be released worldwide on November 21, 2014 and November 20, 2015, respectively.

LGF closed Thursday's regular trading session at $31.73, up $1.05 or 3.42 percent on a volume of 2.17 million shares.