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Alliance Atlantis revs, profits up; stock surges

Video sales boost Canuck conglom

MONTREAL — Strong video sales powered by “The Blair Witch Project” and “Austin Powers: The Spy Who Shagged Me” helped Canuck film and TV company Alliance Atlantis Communications post strong financial results for the third quarter and nine-month period, with both revenue and earnings up significantly.

So far, it has been a good week on the financial front for Alliance Atlantis. The entertainment company’s shares surged 17% on the Toronto stock exchange Monday thanks to telephone giant BCE’s blockbuster bid Friday for television network CTV. Many entertainment stocks are up in the Great White North following the BCE/CTV bid, and there is market speculation that Alliance Atlantis may also be a take-over target thanks largely to its lucrative specialty channel holdings.

After the announcement of the boffo results Tuesday, Alliance Atlantis shares on the Toronto exchange rose again, up 27¢ to $14.64; on the Nasdaq, its stock was up 37¢ to $14.88.

Revenue for the third quarter ended Dec. 31 increased 10.3% to $144 million compared with $131 million in the prior-year period. Net earnings for the third quarter were $9.8 million, compared with net earnings a year earlier of $3.6 million. The big uptick came thanks in part to operating savings stemming from the merger of Alliance and Atlantis 18 months ago.

“The results are very strong across the board,” said analyst Adam Shine from World Markets. “This will continue to restore the company’s credibility on the Street.”

Revenue for Alliance Atlantis’ motion picture group increased 50% to $37 million, compared with $25 million last year. The surge was mainly attributable to the strong video sales in Canada of “Blair Witch” and “Austin Powers.” Gross profit for the motion picture group was $6.9 million, up from $4.2 million a year earlier. The television group’s revenues dipped 3.5% to $85 million, down from $88 million last year as company has decided to reduce the number of hours produced and focus more on high-margin projects.

Deliveries included 14-1/2 hours of children’s programming under the recently launched Alliance Atlantis Kids banner. During the quarter, Alliance Atlantis announced the sale to TBS of “Invincible,” a production by martial arts vet Jet Li and Icon Prods.

Revenues for the broadcasting group, which includes the company’s Canadian specialty channels, increased 24% to $17.5 million, largely due to increases in subscriber and advertising revs for the four networks (Showcase, History Television, Life Network, and Home and Garden Television).

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