Hart's War didn't slay audiences, but it did wound MGM ( MGM).

Tuesday evening, the movie studio cut financial guidance for the first quarter and full-year 2002 because of the poor performance of recent film releases. The move prompted several Wall Street analysts to back away from the stock, although investors more or less stayed in their seats. MGM stock was up 15 cents to $17.11 in midday trading Wednesday.

For the first quarter of 2002, MGM said it expects a net loss of between 35 and 37 cents a share, which is far wider than the 21-cent loss expected by analysts, according to First Call/Thomson Financial. For fiscal 2002, MGM expects to report a net loss of between 46 cents and 48 cents a share, about double the 24-cent loss expected by analysts.

On Feb. 6, when MGM released fourth-quarter earnings, the company was more positive, telling Wall Street earnings before interest, taxes, depreciation and amortization for the full-year 2002 would be up 15%. Now, MGM says 2002 full-year EBIDTA will be break-even. Revenue growth for 2002, previously expected at 22%, is expected to increase by 20%.

The change in outlook comes after a pair of MGM movies flopped at the box office. Combined, Hart's War, a World War II film starring Bruce Willis, and Rollerball, a remake of the James Caan cult film, have grossed just $33 million to date. In comparison, Disney's ( DIS) Snow Dogs has grossed $72 million.

"This highlights the difficulty of investing in a pure-play film studio, which is largely dependent on fickle and difficult-to-predict consumer tastes," Spencer Wang, an analyst with ABN Amro, wrote in a research report Wednesday morning. Wang cut his price target to the high teens from $22 and lowered his 2002 fiscal estimate to a loss of 52 cents a share from a loss of 25 cents a share. J.P. Morgan lowered its 2002 fiscal estimate to a loss of 46 cents a share from a loss of 24 cents a share.

The lower earnings outlook comes as MGM is shopping itself around. In late January, The Los Angeles Times and The Wall Street Journal reported that MGM and Kirk Kerkorian, who owns 81% of the company, had retained Goldman Sachs to help explore a deal. Results like this can't make it any easier.

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