Back to top

Analyst Blog

Strong top-line performance aided Lions Gate Entertainment Corp. (LGF - Analyst Report) to post stellar third-quarter fiscal 2013 results. The company’s quarterly earnings reached 37 cents a share, improving significantly from the loss of a penny registered in the comparable year-ago quarter and came way ahead of the Zacks Consensus Estimate of 24 cents. Including one time items, earnings came in at 27 cents a share.

Total revenue for this Zacks Rank #1 (Strong Buy) stock more than doubled during the quarter to $743.6 million, driven by sturdy performance of the theatrical segment, which reflected solid performance of The Twilight Saga: Breaking Dawn –Part 2 and other films. Moreover revenue gains at home entertainment and international businesses also boosted the results. The reported revenue handily surpassed the Zacks Consensus Estimate of $686 million.

During the quarter, the company reported adjusted EBITDA of $87.2 million, significantly up from $27.3 million in the year-ago quarter. Adjusted EBITDA margin expanded 320 basis points to 11.7%.

Segment Details

Motion Pictures’ revenues of $673.5 million surged 188.7% year over year, reflecting strong performance across Theatrical business (significantly up to $192.9 million from $8.4 million), Home Entertainment (up 72.1% to $221.9 million), International Film (significantly up to $89.5 million from $14.6 million), Television (up to $98.8 million from $22.6 million) and Lions Gate UK (up 120.5% to $36.6 million). However, Mandate Pictures revenues plunged (down 29.7% to $28.2 million).

Television Production revenues decreased 21.9% year over year to $70.1 million, reflecting a decrease of 18.4% in total domestic series licensing revenues to $40.3 million along with a 67.4% decline in Home entertainment releases of television production to $11.1 million, partly offset by an increase of 185.2% in International revenues to $17.4 million.

Other Details

Lions Gate ended the quarter with cash and cash equivalents of $48.2 million with film obligations and production loans of $487.9 million and shareholders’ equity of $192.5 million.  The company generated free cash flow of $125.2 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 as well as television programming for cable and broadcast networks. The company has a strong track record of producing small and mid-budget specialty films. Lions Gate competes with other major studios, such as News Corp’s. (NWSA - Analyst Report) Fox Entertainment Group, The Walt Disney Company (DIS - Analyst Report) and Time Warner Inc. (TWX - Analyst Report).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%