Metro-Goldwyn-Mayer Inc. on Thursday announced that it expects to lose money for the second quarter and the remainder of the year.
Dragging down income and revenue were the Martin Lawrence-Danny DeVito film, "What's the Worst That Could Happen?," a $45-million film that has made $28 million at the box office, and "Josie and the Pussycats," released jointly with Universal Studios, which had a $22-million budget and earned $14 million in the U.S.
Revenue for the second quarter, which ends next week, is expected to be between $265 million and $270 million, compared with $290 million for the second quarter of 2000.
MGM said it would lose 27 cents to 29 cents per share after the effect of new accounting rules. Before the effect of new accounting rules, losses are anticipated to be 24 cents to 26 cents per share. Reported earnings in the second quarter of 2000 were 3 cents per share.
MGM shares were unchanged Thursday at $21.90 in trading on the New York Stock Exchange. Trading was unaffected by the announcement, which was made after the markets closed.
The profit warning capped a management shake-up at Santa Monica-based MGM. Longtime Walt Disney Co. and Sony Pictures marketing chief Robert Levin on Thursday was named president of worldwide marketing and distribution for MGM. Levin immediately flew to New York with MGM Chief Operating Officer Chris McGurk to screen an undisclosed film.
Levin was installed less than 24 hours after McGurk told two senior MGM marketing and distribution executives that they were being replaced. Levin succeeds Gerry Rich, president of marketing, and Larry Gleason, the studio's distribution chief.
Neither Rich nor Gleason, whose contracts expire in October, were at the studio Thursday. McGurk denied the two men were bounced, saying they still have jobs at MGM. He did not say what their roles would be.