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Lionsgate Earnings Jump Past Wall Street Forecasts

Lionsgate has reported earnings of $43.3 million, or 31 cents a share, for its first quarter ending June 30 — far above Wall Street estimates of 17 cents a share.

The studio, which made the announcement after the market closed Thursday, reported revenues declined to $449.4 million from $570 million due to opening only two wide-release movies (“Draft Day” and “The Quiet Ones”) in the quarter compared with the three openings in the year-ago quarter (which included the surprise hit “Now You See Me”).

The quarter included revenues from “Divergent” but nearly two-thirds of the $150 million  domestic box office was taken in during the previous quarter.

The revenue figure was below analysts estimates of about $489 million. CEO Jon Feltheimer noted that the quarter has tended to be the lightest of the year.

In afterhours trading, Lionsgate stock rose 45 cents to $30.80.

Adjusted EBITDA jumped 27% to $77.3 million. That number excluded a  $11.4 million gain on the sale of its interest in FEARnet, stock-based compensation and a $4.9 million restructuring charge to relocate international sales operations to London and integrate the marketing operations of its Lionsgate and Summit film labels.

Lionsgate said adjusted net income benefitted from decreased interest expense and a lower effective tax rate compared to the prior year quarter while EBITDA gains were driven by lower theatrical marketing costs.

“We’re pleased to report strong adjusted EBITDA, earnings and free cash flow generation in what is historically our lightest quarter of the fiscal year,” said Feltheimer. “During the quarter we deepened our portfolio of brands and franchises, extended our global reach and formed entrepreneurial partnerships with digital and traditional platforms alike as we used our strengths as an innovative pure play content company to position ourselves for continued growth and profitability in an increasingly dynamic industry environment.”

TV revenue declined 11% to $117.5 million, as the splitting of the seventh of “Mad Men” resulted in fewer episode deliveries domestically, offsetting strong international performance by “Mad Men,” “Anger Management” and “Orange Is the New Black.”

Overall motion picture segment revenue declined 24% to $331.9 million and home entertainment revenue fell 17% to $140.9 million. “Eder’s Game” and “Red 2” pushed up TV revenue within the motion picture segment by 60% to $58.8 million.

International motion picture segment revenue, excluding Lionsgate U.K., declined 24% to $60.7 million.

 

 

 

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