Lions Gate Entertainment (LGF) delivered lower-than-expected first quarter 2011 results. The company reported a quarterly loss of $0.54 per share, reflecting a sharp drop from the earnings of $0.25 posted in the prior-year quarter, and missing the Zacks Consensus Estimate of $0.03.
The results were hurt by the fall in the top-line and rise in theatrical marketing costs. The escalating cost of motion picture production and marketing may also jeopardize the company’s margins. Moreover, the intense competition from major studios may also result in lower box office receipts.
Last but not least, the company is also currently the subject of a hostile takeover bid from activist investor Carl Icahn, who currently owns a 33.5% stake in the company.
