Lions Gate Entertainment rose the most in more than a decade after video sales of The Hunger Games helped quarterly profit beat analysts' estimates and bolstered the company's outlook for the rest of the year.
Its shares climbed 14 per cent to US$16.68 at Friday's close in New York, the most since May 2001. The stock, which has doubled this year, was the eighth-best performer in the Russell 2000 Index.
James Keegan, the chief financial officer, said Hunger Games home-video revenue had exceeded the studio's expectations. Jon Feltheimer, the chief executive, said Lions Gate expects continued revenue growth from the final Twilight film, to be released this Friday, and from foreign distribution deals that reduce risk on the next Hunger Games film.
"We're in a stronger position than ever to secure competitive terms with our distribution partners, create new output agreements around the world and attract creative talent," said Mr Feltheimer.
Profit for the fiscal second quarter was US$75.5 million, or 53 cents a share, compared with a net loss of $25.3m, or 19 cents, a year earlier. That beat $12.4m, the average of analysts' estimates compiled by Bloomberg.
"The Hunger Games profits really filtered through on the DVD," said Matthew Harrigan, an analyst with Wunderlich Securities in Denver, who recommends buying the shares.
Lions Gate is positioning itself as a major supplier of novel-based films catering to young adults. The studio is releasing the final movie in the Twilight vampire romance series and is developing films based on the books Ender's Game,Chaos Walking and Divergent.
"They've been on a roll creatively for a while now and this is the first quarter you can see that flowing into the financials," said Mr Harrigan.
Sales almost doubled in the quarter ending on September 30, to $707m. Revenue was ahead of the average-analyst estimate of $623.4m.
