Lions Gate Entertainment Corp. (LGF) Earnings: Boffo With Blockbusters

Page 1 of 2

Lions Gate Entertainment Corp. (USA) (NYSE: LGF) reported Q3 earnings after the bell on February 11 and earnings were once again boffo. Revenues soared in every division, four or six fold in most of them, with net income coming in at $0.27 a share compared to a year ago loss and beating expectations of $0.17 a share. The company also earned $125.2 million in free cash flow in the quarter. I bet Mark Cuban and Carl Icahn (who sold out around $7.00 per share) are crying in their beers as they exited the stock before the company soared with their Hunger Games, Saw, and Twilight franchises.

Lions Gate Entertainment Corp. (USA) (NYSE:LGF)Not reflected in the good numbers were two very good box office weekends in a row with $36.7 million coming in for “Warm Bodies” their zombie romantic comedy. Lest you think that number is disappointing the flick opened Super Bowl weekend and drew a lot of teenage girls away from the game. Not everything was champagne and roses with “Stand Up Guys,” too much like an extended Goodfellas Viagra ad, barely bringing in $1.5 million on Super Bowl Weekend. Lions Gate hit a 52 week high on February 11 before reporting, up 67.51% over the last year mainly on the success of Hunger Games and Twilight which pushed them over $1 billion in revenues for the first time.

Why They Beat

Lions Gate truly has its fingers on the teen pulse with its horror movies bringing in teen males, its Twilight and Warm Bodies bringing in teen females, and Hunger Games bringing in both. It has filled a niche the big studios would love to have filled. CEO Jon Feltheimer acknowledged this strength in the earnings release, “The quarter reflected not only the impact of our young adult franchises, but strong contributions from the rest of our theatrical releases and our home entertainment and international operations.”

Lions Gate is a small newcomer to entertainment, only sweet sixteen, but already it is the seventh most profitable film studio. Its success has been linked to its independent status which has allowed it to make controversial and less “commercial” type films like its first big time entry “American Psycho.” The company also owns an extensive movie library comprising over 13,000 titles including home viewing faves Dirty Dancing and the Rambo series.

Its television division has been a critical winner bringing to the small screen hits like Weeds, Mad Men, The Dead Zone, Nurse Jackie, and Tyler Perry shows. The company is also in the beginning stages of building its music studio.

Just The Numbers

The company, famous for the horror flicks it releases between blockbusters like Hunger Games and Twilight, scares investors even more with its 388.10 P/E and governance risks, high for Audit and the Board. The forward P/E for March 2014 drops to 14.01. Like its films it’s not for the faint-hearted. Nor is its debt load of $1.43 billion to total cash of $54.40 million.

With such a huge P/E one would think it would have an even larger short interest than 14.80%, although that’s high enough. The company keeps shocking the shorts with their boffo earnings and I expect the short interest will gradually dwindle.

Although the success of upcoming installments of Hunger Games and Twilight may get baked into the cake there are other catalysts like the home movie release of Twilight-Breaking dawn available March 2. With 24% of moviegoers between age 12 to 24 Lions Gate has a hungry audience and those aged 25-34 watch the most DVDs or on demand movies so Lions Gate has their custom, too with that extensive film library.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!