Here's Why Lions Gate Is Down Today
Lions Gate Entertainment Corp. (NYSE: LGF) was down 1 percent Monday after "The Hunger Games: Mockingjay - Part 1" failed to ignite the weekend box office.
The third "Hunger Games" earned an estimated $123 million from domestic ticket sales, making it the weakest entry in the franchise. The original "Hunger Games" movie earned $152 million during its first weekend. "Catching Fire," the second chapter, earned $158 million when it debuted in November 2013.
Analysts expected "Mockingjay" to perform as well (if not better) than the previous installments.
"I think it will do absolutely awesome," Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, estimated last week. "First of all, people are still hungry for 'The Hunger Games.' There, I said it! Its popularity hasn't petered out."
The IMAX Effect
No one really knows if "Mockingjay's" ticket sales were affected by IMAX Corporation (NYSE: IMAX), which skipped "The Hunger Games" to maintain showings of "Interstellar." B Riley analyst Eric Wold was somewhat concerned ahead of the film's release.
"I think the problem is they don't have IMAX this time, which will hurt them probably a little bit," Wold told Benzinga. "IMAX is going to stick with "Interstellar," which I think is probably the right move for IMAX. In terms of Lions Gate, they probably lose a little bit of that box office push to come from that. But I'm still confident we can get to $425 million [in total domestic ticket sales]."
Moving Past 'The Hunger Games'
Barrington Research analyst James Goss said that Lions Gate has "made a lot of effort to move beyond the notion that all they are is a 'Hunger Games' franchise."
"There are a lot of movies produced at the company," Goss told Benzinga. "They've tried to create additional franchises -- a more robust slate of movies -- and increasingly move into television in multiple ways. I think even they would be very hopeful that the movie would do well, but they don't want to be thought of as just that."
"The Hunger Games" is still Lions Gate's biggest film series. Goss isn't sure if or when Lions Gate will produce a bigger franchise.
"You just never know when lightning will strike," said Goss. "Did you think 'Guardians of the Galaxy' would do as well as it did this year? This is a portfolio business. To think of it any other way is really a roulette table."
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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