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Lionsgate shares fall 5% on lower quarterly revenue

Poor results from the movies "Conan the Barbarian," "Warrior" and "Abduction" helped push the independent studio's quarterly revenue down 22%. Its net loss narrowed 7%.

November 10, 2011|By Ben Fritz, Los Angeles Times

A weak film slate drove Lionsgate Entertainment Corp. revenue down in the quarter ended Sept. 30, causing its stock to fall 5% despite a previous warning by the independent studio.

The Santa Monica company told investors in late September that the box-office underperformance of movies "Conan the Barbarian," "Warrior" and "Abduction" would cause it to lose more money than expected in its fiscal second quarter.

But investors still seemed mildly disappointed Wednesday as Lionsgate reported that its revenue dropped 22% from the same period a year earlier, to $358.1 million. Its net loss of $24.6 million narrowed 7% from a year earlier, driven by a one-time gain of $11 million from the sale of Canadian distributor Maple Pictures. The studio has attempted to shed assets it no longer deems critical.

The studio's box-office revenue plunged 71% during the quarter because of its poorly received movies, helping to push overall motion picture revenue down 36%, to $218.9 million. The studio saw a 15% boost in home entertainment revenue, to $175 million, largely from the sale of four previous seasons of the television show "Mad Men" to Netflix for nearly $900,000 per episode.

Lionsgate's small but growing television production business fared better, with revenue up 21%, to $139.2 million, as it delivered new episodes of programs including "Weeds," "Blue Mountain State" and Tyler Perry's "Meet the Browns."

Revenue from digital distribution of product from its extensive library of movies and television shows — a business on which Lionsgate is counting for much of its future growth — jumped 123% in the quarter, to $65 million.

Since dissident investor Carl Icahn sold nearly all his Lionsgate shares Oct. 18, after abandoning his attempt to take control of the company and oust management, Lionsgate stock has grown steadily. On Oct. 28 it surpassed $8 for the first time since 2008, indicating that fear of an Icahn takeover had caused downward pressure on the share price.

It closed at $8.30 on Wednesday following the release of Lionsgate's earnings.

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