A series of underperforming films returned to haunt Lionsgate in a quarter splattered with red ink, but the company said results were in line with internal and Wall Street expectations.
In results posted after the market closed Thursday, the company said total revenues increased 15% to $198.7 million in the quarter ended June 30. But net losses of $53.1 million were far greater than the net loss of $3.6 million posted a year earlier.
Execs cited a $47 million increase in theatrical marketing expenses from the year-earlier period as the company expands its film slate. In a quarter crammed with seven releases, the only bright spots were “Away From Her,” which has brought in $4.6 million and considerable Oscar buzz, and “Sicko.” The Weinstein Co. doc is nearing $23 million at the B.O., but Lionsgate just gets a domestic distribution fee.
Other titles fared considerably worse: “Hostel: Part II,” “Bug,” “Delta Farce,” “The Condemned” and “Slow Burn” combined for an average wide-release bow of $9.2 million.
“The first quarter reflects our usual frontloaded costs and is in line with our expectations,” said Lionsgate co-chairman and CEO Jon Feltheimer. “Although we are disappointed in the weakness of the early part of our theatrical slate, this performance is offset by our diversification and the overperformance of our other businesses as well as the recognition that the strongest part of our slate is still ahead.”
During a brutal trading session that saw some of the year’s steepest market declines, Lionsgate shares shed 2% to finish at $9.31, before results were announced.
Overall motion picture revenue for the quarter was $170.3 million, up 3% vs. $165.2 million a year earlier.
Homevid revenue of $103.8 million fell 10% from the prior year due to tough comps (the fiscal 2007 period featured “Crash” and “Saw II” and more overall releases than the current quarter). Library revenues for the quarter held steady at $53 million.
Revs for TV and international within the film segment were up 51% and 47%, respectively, to $22.4 million and $22.7 million. The company pointed to its investment in “Dirty Dancing,” the legit production that is following successful runs in Germany and the U.K. with a North American bow.
Television production revenue of $28.4 million in the first quarter increased 289% compared with $7.3 million in the prior year’s quarter, keying on USA’s “The Dead Zone,” ABC Family’s “Wildfire” and Sci Fi Channel’s “The Dresden Files.”