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S&P upgrades outlook on Lions Gate

NEW YORK (AP) -- Standard & Poor's Ratings Services on Friday upgraded its outlook on Lions Gate Entertainment Corp. given the strength of the television and movie company's recent films.

The success of The Hunger Games series and the potential of continued success with the upcoming release of the final film in the Twilight series could prove positive for Lions Gate, the rating agency said.

S&P upgraded its outlook on the company to "Positive" from "Stable." It reaffirmed its "B'' non-investment grade, or "junk," corporate credit rating and all issue-level ratings for the company.

The company has a highly leveraged financial risk profile by S&P's measure and modest cash flows, despite its recent successes. However, the agency expects The Hunger Games franchise could improve the company's profitability and credit profile, as there are three more films expected over the next three years.

S&P said it still expects quarterly earnings and cash flow to fluctuate widely, depending on the timing and success of the releases.

Shares of the Lions Gate Entertainment closed Friday at $16.09, up 93 percent since the start of the year.