Lions Gate Swings to a Profit

Lions Gate Entertainment Corp. on Wednesday turned a year-ago loss into a profit in its fiscal 2005 third quarter, based on last year’s acquisition of Artisan Entertainment’s film library and growth in its core film production and distribution businesses.

Lions Gate, which maintains offices in Santa Monica, reported earnings of $3.4 million, or 3 cents a share, compared with a loss of $37.9 million, or 45 cents, in the third quarter of fiscal 2004.

The Canadian company, based in Vancouver, British Columbia, reported third-quarter revenue of $190.4 million, up from $70.6 million for the same period last year.

Excluding charges, Lions Gate reported a profit of 10 cents a share. The company adjusted net income for a $3.4-million noncash charge for a write-off of deferred financing costs and for stock appreciation rights.

Wall Street had forecast earnings of 10 cents a share on revenue of $182.2 million, according to Reuters Estimates.

Lions Gate Chief Executive Jon Feltheimer was expected to discuss the company’s new five-year plan today in a conference call with analysts.

Analysts said they were closely tracking Lions Gate’s free cash flow for the quarter, which at $32 million surpassed estimates of $25 million to $30 million.

“I would characterize it as a solid quarter,” Sanders Morris Harris analyst David Miller said. “The revenue number was outstanding

Lions Gate shares dropped 1 cent to $10.65 on the New York Stock Exchange.