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Lions Gate Q2 Earnings Recap

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Lions Gate Q2 Earnings Recap

As we move into what is expected to be a entertainment filled movie season, Lions Gate Entertainment Corporation (NYSE:LGF) reported second quarter earnings that beat analyst estimates. The company behind consumer favorites such as The Hunger Games reported it generated earnings of 8 cents a share. Down sharply from 53 cents in the second quarter of last year. The losses in revenue were offset by decline in marketing costs and lower interest expense.

During the second quarter, Lions Gate reported adjusted EBITDA of $56.5 million as adjusted EBITDA margin contracted 420 basis points to 11.3%. The company’s Motion Pictures’ unit saw revenue of $434.4 million, down 28.6% year over year, reflecting soft performances across Home Entertainment which was down 22% to $204.4 million. Moreover, Theatrical revenues fell by 34.5% to $76.1 million, Television was lower by 2.5% to $34.6 million, and Lionsgate U.K. dropped 44% to $27.1 million.

Going into the holiday season the company has positioned itself well. The Hunger Games: Catching Fire, the second installment in the the Hunger Games franchise is set to be released on the 22nd, with Mockingjay Part 1 set to be released on November 21, 2014, and Mockingjay Part 2 set to be released November 20, 2015. In the past this series has been monumental to revenues and earnings for the company. Heading into the rest of week we should see some insight into the estimates of these revenues. A strong holiday showing could set the company up well for a good third quarter report. At the time of this writing shares of the company were unchanged at $32.29 per share as the broad market remained flat.

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