NEW YORK (TheStreet) -- Lionsgate Entertainment (LGF) reported record quarterly revenue and record adjusted EBIDTA when the company released its third-quarter results after the market closed on Thursday.
Lionsgate noted revenue of $839.9 million, a 13% increase from $743.6 million in the same period one year earlier, and adjusted EBIDTA of $151.4 million, up from $87.2 million in the same quarter a year ago. The company cited the domestic and international success of The Hunger Games: Catching Fire movie for the increases, along with the domestic performances of Ender's Game and A Madea Christmas and the international performances of Red 2, Escape Plan and Now You See Me.
The company also posted net income of $88.8 million, or 64 cents a share, and adjusted net income of $96.4 million, or 70 cents a share for the quarter that ended on Dec. 31. Finally, Lionsgate had free cash flow of $117.4 million for the quarter.
Analysts expected Lionsgate to earn 44 cents a share on revenue of $834 million, according to Thomson Reuters.
"Our stellar results in the quarter were attributable to our operating performance, the favorable environment for content and the benefits from our strong balance sheet," said CEO Jon Feltheimer in the company's statement. "We will continue to invest in content and embrace innovative models for licensing that content to digital and traditional platforms alike in order to build on this performance and create additional long-term value for our shareholders."
The stock was up 3.42% to $31.73, up $1.05 from its previous close of $30.68, at the close of the trading day on Thursday. It was down 0.66% to $31.69 in after-hours trading.
TheStreet Ratings team rates LIONS GATE ENTERTAINMENT CP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate LIONS GATE ENTERTAINMENT CP (LGF) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Media industry and the overall market, LIONS GATE ENTERTAINMENT CP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 1675.00% to $139.86 million when compared to the same quarter last year. In addition, LIONS GATE ENTERTAINMENT CP has also vastly surpassed the industry average cash flow growth rate of -6.65%.
- Compared to its closing price of one year ago, LGF's share price has jumped by 77.82%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- 47.51% is the gross profit margin for LIONS GATE ENTERTAINMENT CP which we consider to be strong. Regardless of LGF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.10% trails the industry average.
- LIONS GATE ENTERTAINMENT CP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, LIONS GATE ENTERTAINMENT CP turned its bottom line around by earning $1.57 versus -$0.30 in the prior year.
- You can view the full analysis from the report here: LGF Ratings Report