MGM Studio Reports $61M in Losses
SANTA MONICA, Calif. (AP) _ Metro-Goldwyn-Mayer reported a second quarter net loss of $61.3 million, hurt by two box-office flops.
The studio’s loss, which was reported Friday, translated to 26 cents per share,. That was in line with its previously lowered estimates. In the same period a year ago, the company had earned $6.3 million.
The studio suffered during the quarter from poor box-office showings for ``What’s the Worst that Could Happen,″ and ``Josie and the Pussycats.″ The losses from these two films more than offset increased revenue from rentals and sales from the studio’s vast library.
``The movie business is not a linear business,″ said Alex Yemenidjian, chairman and chief executive officer. ``A picture that loses $3 million gets a lot more attention than a picture that makes $70 million. Our current film, ‘Legally Blonde’ will make a lot more bottom line profit than the loss from the two pictures in our second quarter.″
The loss came on revenues of $274.9 million, compared with revenues of $294.5 million in the same period last year.
The results did not include revenue from its 20 percent stake in four cable television channels owned by Rainbow Media. Officials said revenue from the investment, which was made earlier this year, would be reflected in the next quarter.
MGM said it expects short term performance to be sensitive to hits and misses from its theatrical slate. Longer term, the company said it will lessen its dependence on first run films and benefit from television distribution deals, including a possible television series based on ``Legally Blonde.″
For the first six months, MGM reported a net loss of $461.1 million, or 35 cents per share, compared with a profit of $11.5 million, or 6 cents per share, for the same period last year.
Shares of MGM were up 28 cents at $19.63 in afternoon trading on the New York Stock Exchange.