Lions Gate Profit Down, Revenue Misses View; Shares Tank 7%

(RTTNews) - Lions Gate Entertainment Corp. (LGF) Thursday reported a drop in profit for the fourth quarter, hurt largely by the absence of a hefty tax benefit recorded last year and lower revenues. Nonetheless, earnings for the quarter came in ahead of Wall Street' estimates, but revenues fell short of expectations despite strong performance of "Divergent." The studio's shares fell seven percent in extended trade, following the news.

Lions Gate, the maker of Twilight and Hunger Games movie series, said revenues for the fourth quarter dropped to $721.9 million from $785.7 million a year ago. Analysts polled by Thomson Reuters expected revenues of $823.62 million for the fourth quarter.

Fourth-quarter revenue declined despite strong contributions from "Divergent," a teen, action-adventure movie set in a dystopian version of Chicago. "Divergent," a movie based on the novel of the same name by Veronica Roth, was released only 10 days before the end of the quarter and collected over $250 million globally in box office receipts.

Santa Monica, California-based Lions Gate's fourth-quarter profit dropped to $49.2 million or $0.33 per share from last year's profit of $163.0 million or $1.10 per share.

Last year's bottom line was favorably impacted by an income tax benefit of $86.7 million, compared to an income tax provision of $5.9 million in the recent fourth quarter.

Excluding special items, adjusted earnings for the fourth quarter dropped to $63.5 million or $0.42 per share from $89.3 million or $0.61 per share last year. On average, 11 analysts polled by Thomson Reuters expected earnings of $0.40 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Lionsgate Chief Executive Jon Feltheimer said, "The trajectory of our business, the depth of our content pipelines and the ongoing generation of predictable income from our film franchises, television properties and filmed entertainment library continue to give us excellent long-term visibility."

LGF closed Thursday's trading at $29.53, up $0.75 or 2.61%, on the NYSE. The stock, however, dropped $1.98 or 6.71% in after-hours trade.