Metro-Goldwyn-Mayer reported a second quarter net loss of US$61.3 million, hurt by two box-office flops.
The studio's loss, which was reported Friday, translated to US$0.26 per share,. That was in line with its previously lowered estimates. In the same period a year ago, the company had earned US$6.3 million.
The studio suffered during the quarter from poor box-office showings for What's the Worst that Could Happen, and Josie and the Pussycats. The losses from these two films more than offset increased revenue from rentals and sales from the studio's vast library.
"The movie business is not a linear business," said Alex Yemenidjian, chairman and chief executive officer. "A picture that loses US$3 million gets a lot more attention than a picture that makes US$70 million. Our current film, Legally Blonde will make a lot more bottom line profit than the loss from the two pictures in our second quarter.''
The loss came on revenues of US$274.9 million, compared with revenues of US$294.5 million in the same period last year.
The results did not include revenue from its 20 percent stake in four cable television channels owned by Rainbow Media. Officials said revenue from the investment, which was made earlier this year, would be reflected in the next quarter.
MGM said it expects short term performance to be sensitive to hits and misses from its theatrical slate. Longer term, the company said it will lessen its dependence on first run films and benefit from television distribution deals, including a possible television series based on Legally Blonde.
For the first six months, MGM reported a net loss of US$461.1 million, or US$0.35 per share, compared with a profit of US$11.5 million, or US$0.06 per share, for the same period last year.
Shares of MGM were up US$0.28 at US$19.63 in afternoon trading on the New York Stock Exchange.
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