Optimism about Lions Gate Entertainment Corp.’s upcoming releases sent its stock up more than 8 percent Friday morning, even though the film studio reported lower fiscal third quarter revenue because of no major releases.
After the markets closed on Thursday, the studio, which operates in Santa Monica but has corporate headquarters in Vancouver, British Columbia, said it cut expenses to lower its third-quarter net loss to $1.7 million (-1 cent a share) in the quarter ended Dec. 31. That compares with a loss of $6 million (-4 cents) in the same period a year earlier.
Total revenue fell 24 percent to $323 million, with home entertainment revenue down 7 percent to $163 million. In the year-earlier quarter, Lions Gate debuted three films in theaters, including the horror hit "Saw 3D: The Final Chapter."
Analysts surveyed by Thomson Reuters on average expected earnings of 9 cents a share on revenue of nearly $359 million.
In a Friday conference call with analysts, executives discussed their expectations for growth once the first of its "Hunger Games" movies debuts next month and its $412 million acquisition of Summit Entertainment closes. The deal announced last month brings to the studio the “Twilight” franchise, which has its final installment set for release next year.
“We now have a strong pipeline of franchise properties,” said Chief Executive Jon Feltheimer during the call. “This will significantly increase the consistency, predictability and profitability of our near-term film performance, with highly visible cash flows.”
Shares were up 98 cents, or 8.5 percent, to $11.94 in midday trading on the New York Stock Exchange.