MGM Studio Says Earnings Soar on Films ‘Skyfall,’ ‘Hobbit’

MGM Holdings Inc. (MGMB), the film studio that emerged from bankruptcy more than two years ago, said first-quarter profit more than doubled with the film hits “Skyfall” and “The Hobbit.”

Net income increased to $57.4 million from $23.3 million a year earlier, the closely held Beverly Hills, California-based company, which has filed for an initial public offering, said today on its website. Revenue also more than doubled, to $481.7 million from $179.5 million.

The two pictures added theatrical revenue of $139.5 million, compared with $500,000 a year earlier, the studio said. Future results will reflect the cinema performance of releases such as “Hansel and Gretel: Witch Hunters” and “G.I. Joe: Retaliation,” according to the studio.

“The film slate is strong with two more ‘Hobbit’ films, ‘Hercules,’ a ‘RoboCop’ remake and additional James Bond films,” said Steven Azarbad, co-founder of New York-based Maglan Capital LP, which owns about 1 percent of the company. With brighter film prospects and TV revenue stable, “MGM has the wind at its back and will continue to grow their Ebitda and cash flow for years to come.”

An IPO remains one of several options the company is considering, Chairman and Chief Executive Officer Gary Barber said in response to a question on a conference call.

‘Driving Value’

“We are evaluating all of our options, which include a possible IPO,” he said, without elaborating. “We’re no longer just a library company. We’re really driving value for stockholders across all of our business lines.”

Management didn’t address whether billionaire investor Daniel Loeb, the activist investor who is trying to break up Sony Corp. (6758), is buying MGM shares on the private market. The Hollywood Reporter said yesterday that Loeb has been purchasing the stock. Loeb’s Third Point LLC declined to comment.

In a letter delivered to Sony Chief Executive Officer Kazuo Hirai on May 14, Loeb recommended that the Tokyo-based company sell as much as 20 percent of its entertainment unit in an IPO to free it from the struggling electronics business.

MGM Holdings’ home entertainment revenue also soared in the first quarter on sales from the James Bond film “Skyfall,” to $201.7 million from $36.2 million a year earlier.

Shares of MGM Holdings, intermittently traded over the counter, rose 12 percent to $54.75 at the close in New York.

To contact the reporter on this story: Michael White in Los Angeles at mwhite8@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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