Lions Gate Cuts Loss in Quarter

Lions Gate Entertainment Corp. narrowed its quarterly loss, thanks primarily to strong home video sales of the gospel-inspired DVD franchise by filmmaker Tyler Perry.

The independent studio Wednesday reported a loss of $3.6 million in its fiscal first quarter, an improvement from the $21.8-million loss during the same period a year earlier.

The company, which released last year’s Oscar-winning film “Crash,” reported a loss of 3 cents a share for the quarter ended June 30, compared with a 21-cent loss in the same period in 2005. Revenue was $172.5 million compared with $194 million.

Lions Gate saw a 17% drop in theatrical revenue and an 84% decline in television production sales during the quarter. However, home video revenue increased 18% to $114.8 million because of Perry’s hit movie “Madea’s Family Reunion,” which grossed $63 million in its domestic theatrical release, and his other titles, “Madea Goes to Jail” and “Why Did I Get Married?”

“It was expected to be the company’s softest quarter of the year,” said Eric Handler, entertainment analyst with Lehman Bros. “The lack of television revenue surprised some people. But this is a waiting game because the bulk of their profits will be generated in the third and fourth quarters of the year.”

Lions Gate Chief Executive Jon Feltheimer acknowledged that the theatrical performance of such films as “Akeelah and the Bee,” which grossed only $18 million, was disappointing.

The company will release the Jessica Simpson comedy “Employee of the Month” in October, followed by the third installment in the horror franchise “Saw 3” for Halloween. Lions Gate also will begin to see revenue next quarter from the 11 television shows it has sold to cable channels and the CW network.

“We don’t shoot for home runs,” Feltheimer said. “Wall Street likes our percentage of wins against loses and they are not looking for us to blow our wad on one movie.”

Shares of Lions Gate, based in Santa Monica and Vancouver, Canada, fell 6 cents to $9.16. The earnings were announced after the market closed.