Lionsgate stock slips after missing forecasts

Execs remain bullish about '09 prospects

TORONTO -- Despite posting a higher fourth-quarter 2008 profit after the closing bell Friday, stock in Lionsgate slid Monday after it missed street forecasts.

Stock in Vancouver-based Lionsgate on Monday fell 93 cents, or 9%, to $9.72 during morning trading on the New York Stock Exchange after the company reported a fourth-quarter profit of 22 cents per share that fell well short of Wall Street forecasts of 37 cents per share.

Despite that setback, Lionsgate executives on Monday remained bullish about prospects for fiscal 2009.

Peering ahead, Lionsgate projected overall revenues of $1.5 billion for fiscal 2009, free cash flow in excess of $100 million, domestic boxoffice to exceed $500 million, library revenue to surpass $250 million, and digital revenue to double to $70 million at the end of the current year before they reach a projected $100 million in 2010.

Lionsgate CEO Jon Feltheimer told analysts that recent investments in movie and TV production will pay out in revenue growth and cash generation in fiscal 2009.

"In the past year, we've invested nearly $100 million in new businesses, much of it back-loaded towards the end of the year. We've seen only the tip of the iceberg so far in terms of returns from those investments," Feltheimer said on a Monday morning conference call.

On the theatrical front, Lionsgate expects to release about 18 titles during the current year, with a P&A spend roughly the same as 2008 levels.

The newest title is "The Transporter 3," the Jason Staham and Robert Knepper action picture that Lionsgate acquired at Cannes and aims to release in November.

The 2008 theatrical distribution and marketing costs jumped 118% from year-earlier levels to $326.3 million.

Feltheimer said Lionsgate would profit from that increased P&A spend in fiscal 2009.

"No question, we'll get the benefit of that swing this year," he told analysts.
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