MGM Touts Record Profits in 2014

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Gary Barber

Net income was $156 million, an increase of 27 percent over the prior year, while revenue clocked in at $1.4 billion.

MGM Holdings on Thursday reported net income of $156 million for calendar year 2014, which chairman/CEO Gary Barber described as “its highest annual profits in its modern history for the second consecutive year.”

Titles that contributed to MGM's banner year include the James Bond library, The Hobbit franchise, Robocop and 22 Jump Street, as well as the TV series Vikings and Teen Wolf, among others.

The net income is an increase of $33 million, or 27 percent, over the 2013 results.

Net income in the fourth quarter of 2014 was $42 million, up $29 million from the same quarter of 2013.

MGM also announced that revenue for 2014 totaled $1.4 billion and that its operating cash flow of $373 million was up $96 million, or 33 percent compared to the prior year.

MGM has a potentially strong slate of movies scheduled for release this year, led by the 24th James Bond movie, Spectre, and Creed, the seventh Rocky movie.

This was the first time results of the 55 percent acquisition of United Artists Media Group, a partnership with Mark Burnett and Roma Downey, has been included in MGM's financials. MGM recorded $14 million of net income from the partnership, which had total net income of $25.5 million.

United Artists Media Group expects to have 13 TV shows on the air during 2015, including hits like Shark Tank, Survivor and The Voice. This Easter, it also continues its religious-themed programing with A.D. The Bible Continues, which will air on NBC.

MGM also recorded $22.7 million of income from its 19 percent stake in the pay TV service Epix, which also produced $8.6 million in dividends.

Theatrical revenue in 2014 was actually lower than the prior year at $314.8 million, down $28.7 million from 2013. The company said that was because in 2013 it had revenue from three movies in release — The Hobbit: The Desolation of Smaug, the tail end of Skyfall and international release of The Hobbit: An Unexpected Journey.

Home entertainment revenue also decreased, to $317.3 in 2014, a decline of $179.5 million compared to 2013's $496.8 million take on the back of Skyfall as well as a James Bond library promotion.

However, TV licensing was up to $644.4 million in 2014, an increase of $97.1 million compared to the $547.3 million in 2013. The included revenue from the first season of Fargo as well as the series Teen Wolf, Paternity Court and The Vikings. There was also increased revenue from licensing the movies and improved results for SVOD (subscription video on demand).

MGM is in a very strong cash position with $257.5 million on hand at the end of 2014. They also have a revolving credit facility of $665 million, which has not been tapped. A term loan of $300 million borrowed in June 2014 has been used.

MGM in its conference call did not indicate any plans for an IPO or other major upcoming investments. The stock on the thinly traded private market rose $2.50 on the earnings news to $74 a share. 

CORRECTION 3/19 2:40 p.m. - An earlier version incorrectly stated that MGM said it's cash flow would grow to $400 next year. What the studio said was that it would spend $400 million on content. 

3/19 3:37 p.m. The amount of TV revenue was incorrectly stated in an earlier version.