MGM Revenues Down, DVD Sales Up23 Jul, 2002 By: Joan Villa
DVD lifted disappointing film results to provide the bright spot in MGM second quarter earnings.
Worldwide home entertainment revenues increased 70 percent in the quarter ended June 30, led by 102 percent higher DVD unit shipments worldwide and 73 percent better domestic DVD shipments than the year-ago period.
U.S. unit sales of DVD grew by 151 percent in the first half, more than doubling the overall industry's unit sales growth of 73 percent and future DVD growth shows no signs of flattening, the studio announced.
"MGM's library is on track to deliver record cash flow this year, due primarily to impressive growth in our Home Entertainment Group,” noted Chris McGurk, vice chairman and COO.
Adding in film results, the picture was dimmer, however, as MGM doubled its quarterly net loss to $121.8 million, or 48 cents a share, compared to a $61.3 million loss, or 26 cents a share, in the year-ago period.
The results were primarily due to the disappointing $100 million film Windtalkers, which opened to unfavorable reviews and tallied only $40 million at the box office.
Overall revenues climbed 23 percent to $336.9 million over last year's second quarter.
The studio, however, is pinning high hopes on the November James Bond installment, Die Another Day, which will provide exposure and revenue for other Bond films in the MGM library.
“The bad news is behind us and the good news is ahead of us,” said MGM chairman and CEO Alex Yemenidjian, who predicted “significant improvement” for the second half of the year.