Lions Gate Entertainment Corporation (LGF) recently delivered lower-than-expected first quarter 2011 results, hurt by the fall in the top line and rise in theatrical marketing costs.

The company delivered a quarterly loss of 54 cents a share, reflecting a sharp drop from the earnings of 25 cents posted in the prior-year quarter. The year-ago quarter excludes a gain on extinguishment of debt. Analysts surveyed by Zacks had expected Lions Gate to earn 3 cents a share.

This is a continuation of the first post on the performances of the value stock screens.

Lions Gate Entertainment (LGF), a motion picture and television programming studio, is at the center of an increasingly contentious takeover attempt by activist investor Carl Icahn. For starters, Icahn already owns about 19% of the company, but he is unsatisfied with the current managements’ plans for a merger with fellow movie studio Metro-Goldwyn-Mayer, Inc (aka MGM) which put itself up for sale after failing to make interest payments last year. So, on March 19th Icahn offered $6 per share to buy the rest of the studio, only three cents better than the previous day’s closing price. The Lions Gate board has roundly rejected that offering price from Icahn calling it “financially inadequate and coercive,” and urged investors to reject the bid as well.

Icahn, never one to shy away from a fight, issued a statement this morning where he says Lions Gate management has failed investors as evidenced by the stagnant stock price. The company’s stock has been in a holding pattern, as the rest of the market has rallied over the last year Lions Gate has returned a measly 11% in the last twelve months.

Tuesday, Viacom (VIA) delivered some good news. The company said its premium movie channel joint venture, Epix (developed jointly with Lionsgate (LGF) and MGM), has signed a carrier deal with Verizon (VZ). Viacom also said it was “very pleased” with advance bidding (called “up fronts”) for commercial time on its cable properties in the upcoming TV season. The ad sector, CEO Philippe Dauman suggested, is showing signs of recovery. What was less positive, however, was Viacom’s performance in the quarter ended June 30th.

Adjusted earnings (earnings less severance charges of 3 cents per share) came in at 49 cents a share for the second quarter, the company reported. Down 23% year over year, that was just good enough to beat analyst’s consensus expectations of 48 cents (Thomson Reuters) but revenue numbers missed.

Being an independent studio rather than part of a media conglomerate, isn't helping Lionsgate (LGF) avoid pink slips. The movie studio announced Friday that it's cutting 45 jobs, about eight percent of its staff. This should help generate as much as $20 million in savings, bringing the company's annual operating costs to about $120 million. These cuts are in line with those at other studios, but Lionsgate is in a unique position: last month it reported a $93.4 million quarterly loss, and it's facing a potential hostile takeover.

Billionaire corporate raider Carl Icahn is breathing down Lionsgate's neck.

Last April, in a surprise announcement, Lions Gate (LGF), Viacom (Paramount) (VIA) and [[MGM]] announced plans to launch their own, then unnamed, premium cable channel and video on demand service. Soon after, former Showtime executive Mark Greenberg took the helm and the joint venture, dubbed Studio 3 Networks, began to roll toward a planned Q4 2009 launch.

Little by little, details have trickled out about what’s planned. In November, it was regulatory filings that revealed some of the initial cost data. Last month, it was the brand name for the channel, Epix, discovered. This month, it’s more info on launch plans.

Shortly after Macrovision’s (MVSN) announced sale of the TV.Guide channel to Lions Gate Entertainment (LGF), the stock was upgraded by J.P. Morgan (1/14/09) for lightening its debt after last year’s $2.22B purchase of Gemstar. While the sale has been heralded as an opportunity for LGF to begin creating original programming, MVSN ability continue to focus on guidance technology could bring the stock to the promised land. It is particularly interesting that the upgrade (raise in price target) was based solely on sale of Gemstar assets. No word provided about the real valuation particulars which continue to work in MVSN’s favor such as: Guide Data –

• The sale of TV guide did not include the TV Guide data service (which provides the basis on which the guide channel operates). So even though LGF gets the subscribers to the low-tech scrolling guide channel subscribed by most cable operators, MVSN gains a new revenue stream from sale of TV Guide data to LGF (a revenue stream it didn’t previously have when it owned TV Guide channel).

• Growing dependency on guide data – With DVR (both network and CPE based) penetration expected to reach 41% in 2009, continued growth of digital video satellite and cable service which use guide data within their electronic program guides ((EPG)), along with a growing presence of remote programming/scheduling applications on computers and mobile devices which interface with video service programming the use and need of guide data has gone beyond value add to a must have programming. The two main guide data services are Tribune Media Services ((TMS)) and MVSN (TVGuide) and I’d expect MVSN to make a serious play for TMS in the coming year.

Content Protection

Lions Gate Entertainment (LGF) is the unexpected buyer of the TV Guide Network and TVGuide.com for $255 million from Macrovision Solutions (MVSN).

Just last month, Macrovision announced it struck a deal to sell the divisions to media entrepreneur Allen Shapiro and a division of JP Morgan Chase (JPM) for as much as $300 million. But Lions Gate has plenty of cash on its balance sheet and additional funds from a credit facility, and it reduces payments Macrovision might have to make if the assets don't perform as well as they had in the past. So Macrovision figured this deal was a safer bet — it's now expected to close February 28.