* Studio posts net loss of 17 cents per share
* Revenue rose to $645 million from $377 million year prior
* Shares down 6 percent after hours
By Malathi Nayak and Ronald Grover
SAN FRANCISCO/LOS ANGELES, May 30 Lionsgate
Entertainment Corp swallowed hefty quarterly costs
linked to marketing its 2013 films and buying studio Summit
Entertainment, resulting in a huge earnings miss and sending its
stock price down 6 percent in after-hours trading on Wednesday.
The studio reported a net loss of $22.7 million, or 17 cents
per diluted share, in its fiscal fourth quarter compared with a
profit of $48.7 million, or 34 cents per diluted share, a year
Analysts were expecting Lionsgate to earn 26 cents per
diluted share in the quarter, according to Thomson-Reuters
Lionsgate shares fell to $12.05 in after hours trading on
Wednesday after closing the regular session on the New York
Stock Exchange at $12.85.
"It looks like the company recognized less 'Hunger Games'
profit than I was expecting," said Evercore Partners analyst
Alan Gould, referring to the hit movie.
However, Gould added that he thinks the after market decline
was "overdone and a reaction to headline numbers without enough
detail to fully understand the quarter."
The quarter was not all negative for Lionsgate, with the
studio growing its top-line results.
Revenue for the fourth-quarter rose to $645.2 million from
an adjusted revenue of $376.92 million a year earlier. That was
in line with Wall Street's expectations of $643.1 million,
according to Thomson-Reuters I/B/E/S.
'The Hunger Games' was released on March 23 and has grossed
$396 million domestically and $643 million worldwide. But only
one week of the film's box office gross was factored into the
studio's fourth quarter results, with the remainder going
towards the current quarter. All of the costs associated with
marketing the movie, which are estimated at more than $50
million, were absorbed during the fourth quarter.
The marketing costs for 'The Hunger Games,' combined with
charges related to Lions Gate's January acquisition of Summit
Entertainment for $412.5 million are chiefly responsible for the
studio's large fourth quarter earnings loss.
Lions Gate racked up $49 million in charges related to the
Summit deal, broken out into $36 million in costs and another
$13 million in increased stock appreciation rights. Taken
together, the total equates to a charge of about 36 cents per
As a result of the Summit deal, Lions Gate will inherit the
final installment in the 'Twilight' vampire movie franchise,
which is slated for release in November. A 'Hunger Games' sequel
is due a year later, in November 2013.
Prior to the blockbuster success of the two films, Lions
Gate was primarily known for small budget horror films such as
the "Saw" franchise, as well as Oscar winners 'Precious' and
'The Hurt Locker.' The studio also serves as the home for the
films of comedian Tyler Perry.
In recent years, Lions Gate has also built a thriving
television production operation. 'Mad Men,' 'Weeds' and 'Nurse
Jackie' are among the television shows it is behind.
Lions Gate faced a years-long battle with activist investor
Carl Icahn, who opposed management's strategy and launched an
unsuccessful proxy fight to take control of the studio. Icahn
sold all his shares and abandoned Lions Gate in 2011.