Feb. 05--Lionsgate shares took a dive Friday after the movie and television studio reported worse-than-expected third-quarter earnings, due partly to disappointing profits from the fourth and final "Hunger Games" movie.
The Santa Monica entertainment company's shares fell $8.30, or 33%, to $17.15 in midday trading on Wall Street.
Lionsgate on Thursday said its adjusted profit was $40.7 million for the three months that ended Dec. 31, down nearly 60% from the same quarter a year ago because of lower theatrical film revenue. Total sales for the company fell 10% to $670 million.
The company's stock has been down since "The Hunger Games: Mockingjay -- Part 2" hit theaters last fall.
Lionsgate Chief Executive Jon Feltheimer, on a conference call with analysts, suggested that the relatively weak performance of "Mockingjay -- Part 2" could result in lower three-year profit guidance.
"Although 'Mockingjay 2' grossed $650 million at the worldwide box office, the domestic performance fell short of our expectations," Feltheimer said. "We're currently tracking below our guidance range of $1 .1 billion to $1.2 billion."
Indeed, "Mockingjay -- Part 2" grossed $281 million in ticket sales from the U.S. and Canada, 17% less than the previous installment.
Overall motion picture revenue was $506 million in the quarter, down from $590 million the year before.
"At its core, the motion picture [segment] was much weaker than expected," Stifel analyst Benjamin Mogil said in a research report.
The stock declines also reflected mixed investor reactions to Lionsgate's disclosure that it is considering a merger with the premium cable channel Starz.
In a regulatory filing, Starz said the "Hunger Games" studio "intends to explore whether there is a potential mutually beneficial combination of the two companies."
The new disclosure came about a year after media mogul John Malone acquired a minority stake in Lionsgate through a stock swap with Starz, which Malone also backs.
The filing suggests that the discussions are in early stages and that a deal is not certain to happen, but the companies are exploring a number of different deals that could benefit shareholders of both firms.
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