Taming the roaring lion - MGM report widening losses despite `Die Another Day`s record takings

23-Jul-2003 • Bond News

Reuters - Film studio Metro-Goldwyn-Mayer, owners of the James Bond franchise, on Tuesday reported a wider quarterly net loss due to high movie and DVD marketing costs, as well as a loss on the sale of its 20 percent stake in Rainbow Media cable television channels.

The second-quarter loss of $133.6 million, or 55 cents per share, compared to a net loss of $121.8 million, or 48 cents per share, a year-ago. Quarterly revenues rose to $488 million from $337 million.

MGM said it lost $93.1 million, or 38 cents a share, in the sale of the cable channels. That deal closed on July 18.

The Los Angeles-based company said its operating loss declined to $18.5 million from $99.3 million a year earlier.

MGM said "Die Another Day" became its biggest home entertainment release ever - shipping 16 million units on DVD and VHS. 007 certainly came to MGM`s rescue in the second quarter. Revenues jumped 45 per cent to $488m thanks to his exploits.

Worldwide home entertainment revenues rose 72 percent during the quarter and worldwide DVD unit shipments increased 107 percent.

For the full year in 2003, MGM stuck by its forecast of a net loss of 28 cents to 38 cents per share, which excludes 9 cents per share in profits it had previously expected to receive from the three cable TV channels it sold.

Despite the widening losses, MGM has made a $11.5bn offer for Vivendi Universal Entertainment.

Alex Yemenidjian, MGM`s chief executive, said the company was "not prepared to overpay for MGM or any other asset". He added that if the company failed to buy VUE it would "reward our shareholders by sharing some of our company`s wealth with them".