Lions Gate Entertainment Corporation
(
LGF
) 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 Possession'
, '
The Expendables 2
', '
Step Up Revolution
' and '
Madea's Witness Protection
', along with strong performance at home entertainment by global
blockbuster '
The Hunger Games'.
The revenue was also boosted by healthy growth in the revenue of
international market.
Segment Performance
Motion Pictures'
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
the quarter.
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
and
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
prior-year quarter.
Television Production
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
million.
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 '
The Possession'
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 quarter.
The company's filmed entertainment backlog increased to
$1.2 billion, reflecting strong future revenues, which is
encouraging.
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
. (
TWX
).
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
Report
TIME WARNER INC (TWX): Free Stock Analysis
Report
To read this article on Zacks.com click here.
Zacks Investment
Research