Is Lionsgate in Disney's League Now?

Lionsgate Entertainment will release its quarterly report on Friday, and investors have to be pleased with the movie and television production company's recent success. Although numbers from the recent release of Ender's Game won't show up in earnings for the quarter ending in September, the company is looking forward to coming boosts from the second installment of the Hunger Games movie series that could put Lionsgate in the same league as multimedia content-production giant Disney .

Among investors, Lionsgate is best known for its blockbuster movie series, which began with adaptations of the hit Twilight books. But the company has also developed strong smaller niche markets, with offerings on both the movie and television side of the business targeted at particular audiences and leading to big successes on much smaller budgets than its best-known films. With Lionsgate aiming to build on its partnership with streaming-content distributor Netflix , can the company find an even wider audience for its content? Let's take an early look at what's been happening with Lionsgate over the past quarter and what we're likely to see in its report.

Stats on Lionsgate

Analyst EPS Estimate


Year-Ago EPS


Revenue Estimate

$528.85 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will Lionsgate earnings bounce back?
Over the past few months, analysts have made big cuts to their projections for Lionsgate earnings, reversing an earlier-projected profit for the September quarter and cutting full-year fiscal 2014 projections by about $0.25 per share. The stock has been in a holding pattern, with flat performance since early August.

Lionsgate came into the quarter riding high, with earnings for the quarter ending in June helping push its stock to all-time highs. The company reversed a year-ago loss on a 21% jump in revenue, pointing to success from both a better-than-expected movie showing and its Orange Is the New Black series that it produced for Netflix. Despite the coming end of the wildly popular Mad Men, Lionsgate hasn't hesitated to keep its pipeline full of interesting new concepts, and it has had an enviably consistent track record of profitable filmmaking.

Source: Lionsgate.

The challenge that Lionsgate faces at least for now is that, unlike Disney, its most popular concepts generally have limited runs. Book-based Twilight and Hunger Games have established plots to follow, giving them a huge disadvantage compared to open-ended Disney franchises like the Marvel and Star Wars universes. With a long series of books from Orson Scott Card, Ender's Game could have longer-lasting success, but it's uncertain whether the book sequels would have the mass-market appeal to lead to successful film adaptations.

Meanwhile, Lionsgate has also been consolidating its other media properties. Its partnership with CBS on the TV Guide Network has continued, giving Lionsgate access to 80 million households with its entertainment and celebrity-oriented content. Lionsgate has also branched out into online content production, with the BeFit YouTube channel and its comedy site showing the breadth of its offerings across many different audiences.

In the Lionsgate earnings report, pay less attention to backward-looking figures and instead watch for comments about the coming quarter and the rest of the fiscal year. Movie results are notoriously difficult to predict, but investors will be counting on Lionsgate to demonstrate that it can use its blockbusters and its partnership with Netflix to become a viable competitor to Disney.

Why Lionsgate wants your eyes
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The article Is Lionsgate in Disney's League Now? originally appeared on

Fool contributor Dan Caplinger owns shares of Walt Disney. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Netflix and Walt Disney. The Motley Fool owns shares of Netflix and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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