Lionsgate's earnings are volatile and the company expects to report a net loss for fiscal 2008 ending March 2008. Furthermore, increasing digital delivery of content and piracy will cannibalize DVD sales.
The company reported an 88% plunge in third quarter profits as it increased its marketing and film-making budget. Despite the $110 million in free cash flow Lionsgate expects to post in full fiscal year 2008, the company will still report negative earnings for 2008. Things are expected to get much better in fiscal 2009 (ending March 2009) as the company expects to report earnings before interest, taxes and amortization (EBITA) of $64.3 million.