Eros International PLC (NASDAQ: EROS)
Eros International PLC (EROS), an Indian film company yesterday reported positive second quarter fiscal year 2016 financial results. Revenue was $98.8 million a 98% increase from last year’s period. Adjusted EBITDA was $36 million a 160% increase from last year’s period. Net income was $11 million a 155% increase from last year’s period.
Eros International PLC CEO Comments
Jyoti Deshpande, Eros’ Managing Director and Chief Executive Officer commented,
“It gives me great pleasure to report our second quarter fiscal 2016 results which demonstrate that our business is strong. Fiscal year 2016 has been one of our best years yet in terms of film slate performance as Eros films currently hold three out of the top four box office positions in India. With revenues up by 97.9% to $98.8 million and Adjusted EBITDA up by 159.5% to $36 million in the three months ended September 30, 2015, we can safely say this has been a blockbuster quarter.
The foundations of our business are very strong. We are confident that our 3000 plus film library, our expansive global distribution network, our dominant market share position and last but not the least, our unique Eros Now OTT platform will continue to serve as meaningful growth drivers for our Company well into the future.
Our future slate for the remainder of the year and fiscal 2017 continues to be exciting and we believe that our strong balance sheet and improving cash flow from operations will help us to stay in line with our strategy. In the face of adversity, the unwavering support some of our shareholders have shown towards us is indeed overwhelming and for that we are thankful.” Business Wire
EROS Technical Analysis
EROS gapped up in price yesterday to $8.39, up from the prior day’s close of $7.49, which is a 12% increase on the favorable news. Taking a look at the daily chart, we can see the last time EROS traded above this price level was on November 12th, when it closed at $8.90. Taking a further look back on the chart, we can see that EROS has been tanking since October 12th when it traded at $32.18. EROS collapsed all the way to its 52 week low price of $6.84 on November 13th, a 79% drop. With the favorable news I would be looking for EROS to be a rebound play to recoup some of the losses of the last few months. EROS has a low float of 19.84 million shares and was trading 2.5 times the normal daily trading volume. EROS did reach pre market highs of $8.60, but gave back $0.21 at the open, or equivalent to 2%. For trading purposes, my entry point would have been $8.50 looking for a run through $9.00. My stop loss would have been $8.30, fearing anything below that and the stock would start to fill in the gap up.
Eros International PLC, together with its subsidiaries, co-produces, acquires, and distributes Indian language films in various formats worldwide. The company distributes its film content across various distribution channels, such as theatrical, which includes multiplex chains and stand-alone theaters; television syndication that comprises satellite television broadcasting, cable television, and terrestrial television; and digital platforms, which consist of Internet protocol television, video on demand, and Internet channels, as well as on-demand entertainment portals through Internet-enabled devices. It also distributes its film content through physical formats, such as DVDs and video compact discs (VCDs) in hotels and on airlines, and for use on mobile networks; and distributes and licenses content on physical media, including on Blu-ray and DVDs internationally, as well as on VCDs and DVDs in India. In addition, the company distributes its film content to retail chains and Internet platforms, as well as to wholesalers and retailers; and licenses content to third party distributors internationally to provide content dubbed into local languages for non-South Asian audiences. Further, it is involved in direct sales to corporate customers who bundle the companys DVDs or VCDs with their products for promotional purposes. It has rights for approximately 2,300 films in its library; and holds digital rights for approximately 700 additional films. Additionally, the company operates as a music publisher for third party owned music rights. It also provides music content directly, as well as through third party platforms and licensing deals; and through streaming services, digital streaming, CDs, and publishing/master rights licensing. The company was founded in 1977 and is based in Douglas, the United Kingdom. Yahoo Finance