Lions Gate Entertainment Corporation
), which produces and distributes motion pictures for theatrical
and straight-to-video release, and television programming for cable
and broadcast networks, will release its fourth-quarter 2012
financial results on Wednesday, May 30, 2012.
The Zacks Consensus Estimate for fourth-quarter 2012 stands at
19 cents, with broker estimates within the consensus ranging
between a high of 48 cents and a low of 7 cents. The estimate
reflects a decline of 26.9% from 26 cents reported in the
comparable prior-year period.
The Zacks Consensus revenue estimate for the quarter is pegged
at $616 million, reflecting an increase of 63.4% from $376.9
million reported in the comparable prior-year period.
The revenue estimate reflects the company's growth potential
given the recently-announced multiyear Output agreement with
Nordisk Film. The deal is an extension of a prior agreement
between Nordisk and Summit, which Lions Gate recently acquired.
Nordisk will now distribute titles of both Summit Entertainment and
Lions Gate in Scandinavia. The agreement is expected to maximize
return and build a diversified portfolio for future growth.
Last Quarter Synopsis
Lions Gate reported a loss of one cent per share, improving from
the year-ago loss of 4 cents. However, the reported loss was
substantially worse than the Zacks Consensus Estimate of earnings
of 9 cents per share.
As per the company, a notable rise in equity interest income
facilitated Lions Gate to narrow down the losses.
Total revenue in the quarter plummeted 23.6% year over year to
$323 million, reflecting a lack of theatrical releases in the
quarter. Moreover, reported revenue also lagged the Zacks Consensus
Revenue Estimate of $362 million.
(Refer the article:
Lions Gate's Loss Narrows
Zacks Agreement & Magnitude
Out of the 8 analysts providing estimates for fourth-quarter
2012, none made any revisions in the last 7 days, although 3
analysts raised estimates in the last 30 days. As a result, the
Zacks Consensus Estimate went to 19 cents from 15 cents 30 days
The company recently released its 'Hunger Games' franchise,
which is expected to be accretive for the company's top line. The
upward revision was mainly based on above average 'Hunger Games'
performance and solid TV results.
Looking at the company's performance, we expect LGF to post
better-than-expected earnings results in the coming quarters on the
back of its new launch and acquisition.
Mixed Earnings Surprise History
Over the last four quarters, Lions Gate has beaten the Zacks
Consensus Estimate by an average of 54.2%. The earnings surprise
has topped the Zacks Consensus Estimate in the range of high 250%
and a low of negative 111.1%.
The company's production and distribution capacity will be
supplemented by the integration of Summit's film operations. In
addition, it will also help Lions Gate to emerge as a leading
international sales group by broadening its global reach.
Lions Gate's crown jewel is its library of approximately 13,000
motion picture titles, television episodes and programs. Therefore,
the acquisition will not only build on its distribution
capabilities, but will also expand its stock of feature film and
home entertainment offerings.
To grab its share of box office receipts, Lions Gate competes
with other major studios, such as Fox Entertainment Group,
Paramount Motion Pictures Group and
Time Warner Inc
Lions Gate retains a Zacks #3 Rank that translates into a Hold
rating over the next 1-3 months, reflecting the strategic endeavors
undertaken by the company to put itself on the right path.
LIONS GATE ETMT (LGF): Free Stock Analysis
TIME WARNER INC (TWX): Free Stock Analysis
To read this article on Zacks.com click here.