Lions Gate Prepares for Starz Merger With Beats on Revenue, Earnings

Lions Gate Entertainment (LGF) , which expects to close its $4.4 billion acquisition of premium cable channel Starz (STRZA)  within the next few weeks, positioned itself for becoming a integrated media company by reporting quarterly earnings that beat Wall Street estimates as it turned around its misfiring movie studio and continued to generate profits from its TV business.

The company reported a $17.5 million loss, or 12 cents per share, that took into account costs related to the acquisition and other charges. Wall Street expected a 25-cent loss for the quarter.

Liongate's quarterly revenue of $639.5 million, a 34% increase over a year ago, also beat Wall Street's consensus of $553.4 million.

Its stock closed at $19 on Thursday, down by 78 cents, or by nearly 4%. Lions Gate shares rose by more than 3% in after-hours trading.

"We achieved solid revenue gains across our core businesses, highlighted by another strong performance from our Television Group, in what we expect to be the last quarter for which we report Lionsgate financial results on a standalone basis,"  Chief Executive Officer Jon Feltheimer said in a statement. "We're making great progress in planning the integration of Starz and Lionsgate, and next quarter we expect to report combined numbers that will begin to reflect the scope of our vertically integrated global content platform, supported by strong free cash flow generation and a more diversified income stream."

Revenues increased by 31% at its movie studio, the company's largest unit, to $464.4 million on the strength of strong home entertainment sales of its hit Now You See Me 2 and international sales of its Mark Wahlberg film Deepwater Horizon.

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