MGM Quarterly Results Best Expectations After 'Skyfall,' 'Hobbit'
UPDATED: History's "Vikings" also contributed to a 168 percent increase in revenue for the first quarter.
Metro Goldwyn Mayer was expected to show improved results thanks to the success of films Skyfall and The Hobbit, as well as the TV series Vikings -- but the results are even better than most analysts anticipated.
In the first quarter of 2013, MGM had revenues of $481.6 million, down from $902.6 million in the last quarter last year and $179.6 million in the same quarter last year. That marks a 168 percent increase, year-to-year.
For the quarter, net income was $57.4 million compared to $23 million in the last quarter of 2012.
“These results exceed our expectations,” MGM ceo Gary Barber told investors in a conference call Thursday morning. “This positions us well to achieve our goals this year.”
The biggest driver was theatrical revenue which rose to $139.5 million from $500,000 in the same quarter a year earlier -- most of which came from Skyfall and The Hobbit.
Home entertainment revenue for the quarter was $201.7 million compared to $36.2 million in the same quarter in 2012. A lot of that was from the release of the James Bond 50th set (which sold over 650,000 copies) as well as some from the home video release of Skyfall.
These numbers do not include any revenue from the release (through Paramount) of Hansel & Gretel: Witch Hunters, which the company said grossed $225 million worldwide, or G.I. Joe: Retaliation (also through Paramount). That grossed $350 million worldwide. Home video income from The Hobbit wasn't reflected either.
Barber said the downward trend in home video has changed, stating “the home entertainment market has stabilized.”
Television licensing revenue was $109.3 million, compared to $112.9 million in the same quarter last year. Part of that was impacted, according to the company, by an accounting change. There were also some significant new agreements last year that provided TV revenue.
Barber noted MGM's recent sale of a TV show based on the movie Fargo to the FX Network, on which directors Joel and Ethan Cohen will act as executive producers.
MGM is in good shape. The cash on hand as of March 31 was $150.5 million, up to $103.5 million at the end of 2012. MGM said it has $561 million in liquid assets and cash available. The company also noted it has drawn down only $165 million on its revolving bank loans, which have a capacity of about $650 million.
Bank debt is also down. MGM owes banks $240 million at the end of March compared to $371 million at the end of 2012.
MGM has four releases this year. Still to come is the remake of Carrie and the second Hobbit sequel.
Barber declined to comment on when and if they would do an IPO to make their stock public. In private market trading, MGM shares continue their rapid rise of the past month, selling for above $55 a share on Thursday compared to $39 a share at the end of April.