MGM's first order of business was reporting a loss of $0.09 per share, versus a loss of $0.22 in the year-ago period, which was pretty much in line with expectations. Impressive in the announcement was the company's 17% revenue increase, largely spurred by a 44% gain in worldwide sales of home videos and 58% higher DVD shipments.
With its earnings in line, MGM continues to be a prime takeover candidate. There are reportedly a number of suitors, including Sony
MGM's movies, such as Barbershop 2: Back in Business;Walking Tall; and Agent Cody Banks: Destination London, pulled in a respectable $127 million combined, but were far from being blockbusters. The company's obvious value as an acquisition target is its extensive 4,000-title-plus film library. An acquisition by Comcast would make complete sense, but it probably won't happen because while Comcast was busy making overtures to Disney
MGM has worked hard on its operations to get the perfect close-up (or should that be close-out?). Its solid filmmaking skills have not waned over the generations and it has become quite the little cash-generator.
If I were Comcast's management, I would circle the wagons pronto and hustle to acquire MGM. Comcast would be paying a fraction of the cost ($6 billion vs. the $60 billion offer for Disney) to get an entertainment industry pure play with a potential monumental reduction in Eisner-like headaches.
Sony, if you're out there, I would sprint to get the MGM deal done before it slips out from under you.
Time Warner is a Motley Fool Stock Advisor selection. Sign up for six months, risk-free, to learn more.
Fool contributor Phil Wohl spent over 12 years on Wall Street and now concentrates his writing on more fictional characters. He has no stake in any firm mentioned above.