MGM Revenues Down 9% Despite Last ‘Hobbit’ Movie

Despite contributions from the last “Hobbit” movie, MGM Holdings has reported a 9.1% decline in third quarter revenues to $212.1 million.

MGM blamed lower home entertainment revenues for the decline.

Earnings for the privately held company quadrupled to $124 million from $28.6 million from the year-ago quarter but that gain stemmed from an $83.1 million tax benefit, which resulted from tax election changes that increased prior years’ net operating losses and yielded higher deductions.

Net income before taxes slid 13.2% to $40.9 million.

Operating results were ahead of expectations, keeping the company on track to achieve its anticipated growth in profitability for 2015 despite the negative impact of a strong dollar on foreign currency values.

Home entertainment sales slid 26% to $31 million as sales for “Hot Pursuit” and “Poltergeist” were not recorded as MGM does not control all the home entertainment distribution rights for the those titles.

TV licensing edged up by $1.9 million to $152.5 million, thanks to the international pay TV and VOD availabilities of “The Hobbit: The Battle of the Five Armies” and initial deliveries of the second season of “Fargo” to FX.

Theatrical revenues fell 12.3% to $5.7 million, though MGM did not specify which titles were in release. The war dog drama “Max” — which Warner Bros. handled — generated $42 million in domestic release following its June opening.

MGM is a co-financer with Sony on the 24th James Bond movie “Spectre,” which has already grossed over $300 million worldwide. Besides “Spectre,” the MGM slate includes the “Ben-Hur” remake via Paramount and the Rocky spinoff “Creed,” which will go out through Warner Bros.

Although MGM is privately held, it has been making its financial results public since it emerged from bankruptcy in 2010.

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