Metro-Goldwyn-Mayer (MGM) has warned that its second quarter results for the year as well as its full fiscal year 2001 results will be lower than anticipated "as a result of two theatrical releases which did not meet the company's expectations."
Revenues for the second quarter ending June 30, 2001, are expected to be between $265m and $270m, compared to $290m in the same quarter last year, while earnings before tax (EBITDA) are expected to be a loss of between $30m and $35m compared to a loss of $24.5m in the same quarter last year.
For the full year, the company had previously stated that it expected 2001 EBITDA to decline by 8-10% to approximately $110m due to difficult comparisons in the ancillary markets from a reduced theatrical release schedule in 2000. Based on this revised second quarter outlook, MGM now predicts its earnings to be in the $85m-$95m range.
The films in question released during the second quarter are Heartbreakers starring Sigourney Weaver and Jennifer Love Hewitt and What's The Worst That Could Happen' with Martin Lawrence and Danny DeVito.
Chairman and CEO Alex Yemenidjian was confident, in a statement, that the rest of the year would improve: "We remain confident," he said, "of our growth outlook for the second half of 2001 and all of 2002. Our release schedule for the balance of this year holds great promise and our home video and television distribution operations continue to generate stronger than expected revenue and cash flow."