Lionsgate Stock Plunges After 'Mockingjay 2' Disappoints
The studio failed to reassure investors after releasing its third quarter earnings on Thursday.
Shares of Lionsgate tanked Friday after an analyst call where top studio execs failed to reassure investors over weaker-than-expected box office for The Hunger Games: Mockingjay – Part 2.
Lionsgate shares fell $8.21, or 32 percent, to $17.20 during mid-day trading on the New York Stock Exchange, a fall that also followed confirmation that Starz acquisition talks had resumed.
Lionsgate reported Thursday "softer than anticipated" performance at the multiplex for its movie releases. The Hunger Games: Mockingjay – Part 2 grossed $650 million worldwide, but its box office was lower than Mockingjay – Part 1 and cost more to produce.
The studio also missed on analyst profit estimates of 52 cents per share, as adjusted earnings came in at 42 cents per share. Lionsgate execs during an analyst call Friday said Mockingjay 2 underperformed in Europe due to the impact of the Paris terror attacks, and in China owing to a crowded marketplace.
Lionsgate vice-chairman Michael Burns during the analyst call Friday also downplayed current talks on a possible merger between his studio and Starz. Burns said Lionsgate has traditionally done "disciplined" and accretive strategic acquisitions, and would not compromise on a possible Starz combination.
"Unless we thought something made a great deal of sense to us from an accretive standpoint and ... unless we thought there were synergies, I wouldn't expect us to do any deal," he said during the call.