Lions Gate Entertainment Corporation
) recently posted a robust second-quarter 2012 results. The
quarterly earnings of 53 cents a share substantially exceeded the
Zacks Consensus Estimate of 8 cents. Moreover, earnings witnessed
a significant improvement from a loss of 27 cents reported in the
comparable prior-year period.
Lions Gate's strong performance in the quarter was the result
of solid double-digit growth in revenue, mainly due to healthy
box office result and home entertainment revenue.
Total revenue soared 97% year over year to $707.0 million, and
also surpassed the Zacks Consensus Estimate of $619.0 million.
The better-than-expected year-over-year growth was witnessed due
to hearty response at the box office from the films such as '
The Expendables 2
Step Up Revolution
' and '
Madea's Witness Protection
', along with strong performance at home entertainment by global
The Hunger Games'.
The revenue was also boosted by healthy growth in the revenue of
revenue of $608.0 million surged 178.0% from $218.9 million in
the prior-year period. This segment includes the revenues of
'Theatrical', 'Home Entertainment', 'Television',
'International', 'Lionsgate UK', and 'Mandate Pictures.
Theatrical category revenue surged to $116.2 million compared
with $22.3 million in the prior-year quarter. The increase was
due to good response at the box office for the films released in
the month of June.
Home Entertainment category's revenue augmented 117.5% to
$261.9 million against $120.4 million in the comparable quarter
last year, mainly driven by the release of 'Hunger Games' during
International revenue (excludes Lionsgate UK) recorded an
increase of 382.1% to $108.0 million from $22.4 million in the
second quarter of 2011, driven by global release of Hunger Games
along with strong revenue from
Cabin In The Woods
What To Expect When You're Expecting
Step Up Revolution
Cold Light Of Day
Lions Gate UK's revenue was up by 120.0% to $48.4 million from
$22.0 million, driven by the company's strong performance at the
theatrical division by the releases made during the quarter.
Television category revenue came to $35.5 million compared
with $28.2 million in the prior-year quarter, reflecting an
increase of 25.9%, whereas Mandate Pictures revenue came in at
$31.6 million, up substantially from $2.4 million in the
revenue decreased 28.9% year over year to $99.0 million,
reflecting a 70.9% decline in Home entertainment category of
television production to $15.9 million along with decrease of
28.0% in International revenue to $9.0 million, partly offset by
2.4% increased revenue from domestic series licensing to $73.4
During the quarter, the company reported adjusted EBITDA of
$109.7, which improved from a negative EBIDTA of $13.4 million in
the year-ago quarter. The improvement in EBIDTA during the
quarter was witnessed mainly due to strong theatrical box office
performance of '
along with healthy international results.
Lions Gate ended the quarter with cash and cash equivalents of
$54.4 million with film obligations and production loans of
$437.6 million and shareholders' equity of $146.2 million.
The company generated a free cash flow of $18.9 million during
The company's filmed entertainment backlog increased to
$1.2 billion, reflecting strong future revenues, which is
Lions Gate is a film studio engaged in the production and
distribution of motion pictures for theater and straight-to-video
release and also television programming for cable and broadcast
networks. The company has a strong track record of producing
small and mid-budget specialty films. Lions Gate operates in the
entertainment industry with other major studios, such as Fox
Entertainment Group, Paramount Motion Pictures Group and
Time Warner Inc
Currently, we have a long-term 'Neutral' recommendation on the
stock. Moreover, Lions Gate holds a Zacks #3 Rank that translates
into a short-term Hold rating for the next 1-3 months.
LIONS GATE ETMT (LGF): Free Stock Analysis
TIME WARNER INC (TWX): Free Stock Analysis
To read this article on Zacks.com click here.