Lionsgate Expects ‘Divergent’ Sequel ‘Insurgent’ to Hit $350 Million or More

Divergent

Sounding bullish on the outlook for the “Divergent” franchise, Lionsgate CEO Jon Feltheimer has forecasted that the second film, “Insurgent,” should gross between $350 million to $400 million worldwide.

That would represent an increase of 27% to 40% above the estimated final gross of around $275 million expected for “Divergent,” starring Shailene Woodley and Theo James. “Divergent” opened March 21 and has grossed $266 million.

“Insurgent,” which went into production last week, will open March 20 with Lionsgate splitting “Allegiant” — the last book in Veronica Roth’s dystopian trilogy — into two films that will open in 2016 and 2017.

Feltheimer said the “Divergent” franchise will be making significant contributions to Lionsgate’s profits into 2018. He noted that Roth’s books have sold 20 million copies worldwide, a pace that he asserted is steeper than the trajectory at this point in the franchise than for the books in Suzanne Collins’ “Hunger Games” trilogy.

The CEO also said he expects Woodley’s “The Fault in Our Stars,” a drama Fox will open June 6, will “enhance” her status.

Feltheimer made the disclosure during a conference call with analysts Friday, a day after Lionsgate reported earnings that fell short of estimates — a departure from recent quarters.

The report, issued after the market closed, disappointed Wall Street and the stock opened sharply lower, falling 12% with a decline of $3.40 to $26.13 on the New York Stock Exchange.

For the fiscal year ended March 31, Lionsgate reported earnings of $152 million, or $1.11 per share, down 34%. Revenue declined 3% to $2.63 billion with adjusted EBITDA of $370.8 million.

Feltheimer said combined EBITDA for the next three fiscal years should come in between $1.2 billion and $1.3 billion. Annual revenues should reach $3.25 billion in 2017, he added.

Feltheimer also disclosed he expects the company will increase its dividend payouts to shareholders.

The studio paid its second-ever quarterly dividend of 5 cents a share on Friday to  shareholders of record on March 31. “It’s our intention to increase the dividend on a yearly basis,” Feltheimer said.

Feltheimer also touted Lionsgate’s TV business, comparing the upcoming “Manhattan” series to “Mad Men” and “Orange Is the New Black.” And he noted that “Orange” and “Nashville” have been renewed third seasons, putting them on track for syndication sales, and predicted that annual operating profit for Lionsgate TV will hit $100 million within “a couple of years.”

Lionsgate reported Thursday that its TV revenue for fiscal 2014 jumped 18% to $447 million.

The CEO also said Lionsgate has continued to repurchase shares. The company reported Thursday that since the December increase in its share repurchase authorization to $300 million, it has repurchased a total of 3.4 million common shares for an aggregate price of $90.5 million.

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  1. Jackie says:

    I predict worldwide of $300-325M, skewing closer to the lower end. A lot of people who weren’t existing fans watched the first movie. A lot of those people weren’t too impressed. A lot of the ones who were ended up deciding to read the books, and a great deal of THOSE regretted ever bothering with any of this by the time they finished the last one, so that’s a lot of “new fans” who will likely opt out of continuing with the film series.

  2. Phil Schumm says:

    I predict sales will be significantly lower for a movie that will cost considerably more.

  3. Brad says:

    It is remarkable stupid at the CEO of the studio to come out promising the blockbuster success of a movie that has yet to be released, or even completed. The first one was hardly a runaway smash, it seems largely forgotten some two months later already.

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