Lions Gate Entertainment Corp. stock plummeted 28% on Friday to $18.18, potentially complicating discussions for the studio behind "The Hunger Games" to merge with premium cable channel Starz.

Shares began falling Friday morning after Chief Executive Jon Feltheimer said on a conference call with analysts that the company was "tracking below" its prior guidance range for adjusted earnings, but didn't update the figure.

Lions Gate previously said it expected a total of between $1.1 billion and $1.2 billion in adjusted earnings before interest, tax, depreciation and amortization (or Ebitda) for the current fiscal year, which ends in March, and the next two.

Mr. Feltheimer said that with several major film releases coming out in the next six weeks, including the big-budget "Gods of Egypt" and "The Divergent Series: Allegiant," he didn't want to provide updated guidance numbers until the company's next earnings call, in May.

Thursday afternoon Lions Gate released financial results for the quarter ended Dec. 31 that came in lower than expected, largely due to a disappointing box office performance for "The Hunger Games: Mockingjay—Part 2" in the U.S. and China.

The same day, Lions Gate disclosed in a regulatory filing that its board of directors informed Starz it wants to explore a potential merger. Mogul John Malone, who is Starz's largest voting shareholder and is on the Lions Gate board, has previously said he believed that the two companies could combine and buy other "free radicals" in the media businesses as well.

The sharp drop in Lions Gate's share value could complicate such a deal, given the decreased purchasing power of the studio's equity. Starz stock fell a sizable 22.2% Friday to $24.30.

Lions Gate executives also disclosed news about film and TV projects on Friday's call, including plans for a movie based on the 1980s television show "MacGyver" and a three-season renewal of "Orange is the New Black," which it produces for Netflix Inc.

Mr. Feltheimer said Lions Gate has "a clear path back" to the annual earnings it has typically reported in the past but is falling short of this year.

Write to Ben Fritz at ben.fritz@wsj.com

(END) Dow Jones Newswires

February 05, 2016 16:25 ET (21:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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