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Disappointing results for LGF

Lionsgate Films reported disappointing results for the fiscal third quarter of 2009 with a $93.4 million loss or 81 cents/share after stumbling with movies like Transporter 3 (as much as I like Jason Statham, he needs to break out of the genre), unusually high DVD returns from retailers and missing the boat on a slew of independent movies like multi-Oscar winner Slumdog Millionaire even after original distributor Warner Independent Pictures dropped it in 2007. Lionsgate posted the loss despite an 8% increase in quarterly revenue to $324 million from $299 million last year. The company does expect to post "significant" positive EBITDA (earnings before interest, taxes, depreciation and amortization) next fiscal year, which begins in April 2009. Activist investor Carl Icahn has continued to increase his stake in Lionsgate as discussed in this BusinessWeek article titled How Icahn Would Attack Lionsgate. While I do not plan to add to my Lionsgate position, it will be good to see some pressure on management to return to the basic formula that has worked so well for them in the past and move away from acquisitions such as the recent $255 million acquisition of the TV Guide Network.

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