With all the hubbub aboutPixar
However, Lions Gate's biggest assets are not just in box offices. One strong point is its 8,000-title-strong library, which generates a steady stream of revenue. Sony's
The company has also demonstrated success in selling DVDs, most notably The Punisher, a DVD of the movie it co-produced with Marvel Studios. The title sold nearly 2 million units in its debut week. Lions Gate has also signed a deal with Marvel to collaborate on direct-to-DVD animated movies. Direct-to-video is a core aspect of Lions Gate's business -- the company expects to realize more than half its fiscal 2005 revenue from its planned release of 84 titles.
With second-quarter net income of $8.3 million, or earnings per share of $0.08, Lions Gate absolutely mauled expectations and is looking forward to a strong fiscal 2005, projecting net income of $25 million on revenue of $750 million. Because of the depth of its library, the company has often been seen as an acquisition target, but Lions Gate can definitely stand on its own four feet. Insiders have great faith in the company's prospects, too -- Lions Gate boasts nearly 30% insider ownership, with three officers ponying up a total of $1 million in share purchases at the beginning of the year.
Lions Gate has caught moviegoers' eyes on the big screen. Now that the company is profitable and set to roar into 2005, it's time for investors to sit up and pay attention, too.
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Both Marvel and Pixar are Motley Fool Stock Advisor recommendations.
Fool contributor Tim Goh owns shares in Marvel Enterprises.