Shares at 28 cents well above expectations
Easily topping Wall Street estimates thanks to the final “Twilight” film, Lionsgate has reported earnings of $37.8 million, or 28¢ a share, on revenues of $743.6 million and EBITDA of $87.2 million for its third quarter ended Dec. 31.
The studio released the report Monday after the market closed. The consensus estimate by analysts had forecasted Lionsgate earnings to come in at 17¢ a share with revenues of $720 million.
Before the report was released, shares of Lionsgate soared to an all-time high on ongoing Wall Street bullishness, rising 3.2% and gaining 61¢ to $19.74 — more than double the $8.60 a share price when Lionsgate bought Summit a year ago. Shares jumped another 34¢ in after-hours trading to $20.08.
The results point to the benefits of the $412.5 million Summit deal, which brought the “Twilight” franchise to Lionsgate a year ago.
Revenue increased by 130% compared to the year-earlier quarter, driven by the strong domestic box office performance for “The Twilight Saga: Breaking Dawn Part 2,” which grossed $828 million worldwide, along with continued strong home entertainment and international revenue along with increased pay TV revenue.
EBITDA quadrupled, and the earnings compared with a $1.4 million loss in the prior-year quarter, with the company saying stronger revenues more than offset increased marketing costs for a larger slate of films.
Lionsgate noted that, excluding the $14.7 million noncash expense for paying off its Summit term loan, earnings adjusted were $52.4 million or 39¢ a share per basic share. And it said its filmed entertainment backlog — future revenues not yet recorded from sources such as output deals — was $1.2 billion as of Dec. 31.
“The quarter reflected not only the impact of our young adult franchises but strong contributions from the rest of our theatrical releases and our home entertainment and international operations,” said Lionsgate CEO Jon Feltheimer. “Our revenue growth compared to the prior year quarter was matched by continued strong EBITDA and free cash flow that will enable us to continue our focus on optimizing our capital structure and deleveraging our balance sheet.”
Overall motion picture revenue increased 189% to $673.5 million, thanks to “Twilight,” “Sinister” and “The Impossible.” That included home entertainment revs of $233 million, up 43%; TV revenues from films, which quadrupled to $98.8 million; and international motion picture revenue rising of $89.5 million, up by a factor of six.
Television production revenue declined 22% to $70.1 million as strong international sales of “Anger Management,” “Mad Men” and “Weeds” were offset by revenue declines in domestic series licensing due to timing.
Wall Street analysts are bullish on Lionsgate due partly to confidence that it will continue succeeding with young-adult tentpoles. It launches the DVD of the final “Twilight” on March 2, and its potential franchise starter “Ender’s Game” opens on Nov. 1 and “The Hunger Games: Catching Fire” three weeks later.
Studio is also in pre-production on “Divergent,” based on the series of dystopian novels by Veronica Roth. Directed by Neil Burger, pic will star Shailene Woodley and has been dated for March 21, 2014 — the same weekend that “Hunger Games” opened in 2012.
In 2012, Lionsgate became the first non-major to top the $1 billion mark in domestic grosses and $1 billion in foreign grosses in a year, mostly due to “Hunger Games” and “Twilight.” The company closed an $800 million refinancing deal in September with JPMorgan and Bank of America and paid down its $500 million loan to buy Summit more than two years ahead of schedule.