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MGM's 3rd-Quarter Profit Doubles on DVD, Video Sales

October 25, 2000|From Bloomberg News

Metro-Goldwyn-Mayer Inc., owner of one of the largest film libraries, said third-quarter profit more than doubled on video and DVD sales of movies such as the James Bond thriller "The World Is Not Enough."

Net income rose to $27.1 million, or 13 cents a share, from $10.3 million, or 7 cents, a year earlier. Revenue rose 5.4% to $315.4 million from $299.3 million.

MGM, controlled by billionaire investor Kirk Kerkorian, boosted profit even though it released only one film, "Autumn in New York," widely in theaters during the quarter. The company sold more videos and digital video discs of recent movies such as "The Thomas Crown Affair" and "Supernova."

"They had just tremendous growth in the DVD market," said Sutro & Co. analyst David Miller, who rates MGM shares an "accumulate."

Aggressive licensing of films including "Tomorrow Never Dies" and "Stigmata" for television broadcast also boosted profit, the company said.

MGM released older films, including "This Is Spinal Tap," "Yellow Submarine" and "The Princess Bride," for the first time on DVD. The company's DVD sales rose more than fourfold in the quarter to more than $50 million, Vice Chairman and Chief Operating Officer Chris McGurk said on a conference call with analysts.

The Santa Monica-based company said two weeks ago that it would earn between 10 cents and 13 cents a share, beating the 1-cent-a-share average estimate of analysts polled by First Call/Thomson Financial.

MGM shares rose 44 cents to close at $20.38 in New York Stock Exchange trading. The stock has fallen 13% so far this year.

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