The Lion’s roar faded in the fourth quarter as MGM reported a slump in earnings in a period when it had only one pic in limited release.
In one of its last quarterly earnings reports before being swallowed up by Sony and its investment consortium, studio posted a 17% drop in revenue to $453.4 million and a 35% fall in net income to $38.5 million.
Company took $10.4 million in charges for early election of stock options and other expenses related to its pending acquisition.
With UA’s “Hotel Rwanda” its only release in the quarter, studio made virtually all its money from homevideo and TV. MGM released “Walking Tall,” “The Good, the Bad and the Ugly” and the “Pink Panther” series on DVD in the quarter, and had success with its two “Stargate” skeins on the Sci Fi Channel.
TV division was the Lion’s bright spot as revenue increased 74% to $80 million and earnings before income taxes and other expenses more than tripled to $26.1 million. Film division saw revenue drop 25% to $361.4 million and earnings before income, taxes and other expenses fell by a third to $66.9 million.
For the year, MGM slashed its net loss by 82% to $29.2 million; revenue was down 8% to $1.72 billion.
“We are especially pleased that over the past two years, MGM has generated $333 million in net cash from operating activities, which is considerably stronger than expected,” stated CEO Alex Yemenidjian.
Studio’s slate for the next few months includes “Be Cool,” “Beauty Shop” and the “Amityville Horror” remake.
Acquisition of MGM by Sony, Comcast and a group of private equity funds may close as early as April 1, meaning the current quarter will likely be the last full one for which the Lion reports earnings.
MGM shares closed up slightly at $11.90 on Thursday before earnings were announced.