Lions Gate posts upbeat 2Q; eyes `Precious' profit

By RYAN NAKASHIMA

posted: 91 DAYS 14 HOURS AGO

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LOS ANGELES -Niche movie studio Lions Gate Entertainment Corp. posted a second-quarter profit helped by producing shows like "Weeds" and "Mad Men," and raised high hopes for its gritty, critically acclaimed movie, "Precious."

Net income in the quarter ended Sept. 30 came to $31.7 million, or 26 cents per share, the company reported Monday, reversing a loss of $51.8 million, or 44 cents a share, from a year earlier. Revenue rose 3 percent to $394 million from $380.7 million.

Excluding one-time items, earnings came to 23 cents per share, handily beating the average forecast of analysts polled by Thomson Reuters of 6 cents per share.

Double-digit percentage declines in revenue from theatrical movies and home video releases were more than offset by new revenue from its TV Guide Network cable channel and a boost in TV show production revenue.

As well, its movie, "Precious: Based on the Novel `Push' by Sapphire," opened to $1.9 million in box-office revenue last weekend, reaping an astonishing average of $104,000 from each of its 18 theaters.

Lions Gate plans to expand release of the movie to between 800 and 1,200 theater screens by Thanksgiving, with more than 2,000 at its peak.

The studio bought the rights to the Sundance Film Festival award-winner for just $5.5 million. It is already generating Oscar buzz.

"We expect the picture to be solidly profitable in any case," co-Chief Operating Officer Joe Drake told analysts Tuesday.

For the year, Lions Gate maintained its outlook for earnings before interest, taxes, depreciation and amortization to be above $75 million.

The company also said that Epix, its joint venture pay-TV channel with Viacom Inc.'s Paramount Pictures and Metro-Goldwyn-Mayer Inc., is on track to reach more homes soon.

Epix launched Oct. 30 with just one distribution deal to run on Verizon Communications Inc.'s FiOS network, which has 2.5 million customers.

"I think we are really pointing to trying to get a couple of other distributors on for the beginning of the year, for potentially even as early as January," said Chief Executive Jon Feltheimer. "So, we think we are on track on those negotiations."

2009-11-10 14:30:33