×

Lionsgate Stock Slides 12% on Lowered Growth Forecast

Shares of Lionsgate slid 12% Friday to an eight-month low after the company told analysts that its previously expected growth would be pushed back a year.

Shares declined by $3.76 to $26.81 in trading on the New York Stock Exchange. It was the lowest close since June 20, when the issue closed at $26.61.

CEO Jon Feltheimer said in the earnings conference call on Thursday that the company was on track to meet expectations for the current fiscal year, which ends March 31.

“As we continue to add scale to our platform by investing in talent and content continue to expand Starz internationally and ramp up our emerging businesses,” he said. “The growth we had originally anticipated in fiscal 2019 will likely be pushed back a year to fiscal 2020. We expect this increased investment in content to lead to greater returns for our shareholders, as well as enabling us to resume our strong growth trajectory.”

KeyBanc Capital Markets analyst Evan Wingren downgraded Lionsgate from Overweight to Sector Weight.

“Although we think Lionsgate should continue to trade at a premium to ad-supported cable network peers, even accounting for this on lower estimates, we struggle to justify upside for a more positive view,” the analyst said in a Friday note.

Wingren also said Lionsgate’s investments in original content promise uncertain payoff as programming competition increases. Lionsgate bought Starz in 2016 for $4.4 billion.

CFRA analyst Tuna Amobi cut the firm’s 12-month target price by $5 to $30 and reduced the fiscal year 2019 target by 19 cents to $1.36.

Lionsgate reported higher earnings of $193 million, or 87 cents a share, for its third quarter ended Dec. 31, compared with a $30.6 million loss in the same quarter last year. The studio cited strong performances from its motion picture segment and its Starz premium cable network along with a tax break. It easily beat analyst forecasts of Lionsgate earning 25 cents a share during the latest quarter.

Revenues gained 52% to $1.14 billion — again far above the Wall Street consensus of $1.08 billion. Net income included a one-time income tax benefit of $165 million reflecting the impact of the lower U.S. income tax rate under the new tax laws on  net deferred tax liabilities.

The stock rose to above $35 a share between Jan. 19 and 26 following speculation that Lionsgate could be a takeover target for  potential buyers including Amazon, Verizon, and a combined CBS-Viacom.

More Film

  • Ryan Simpkins

    Ryan Simpkins Joins Fox-Disney's 'Fear Street' (EXCLUSIVE)

    Ryan Simpkins has joined Fox-Disney’s second installment of 20th Century Fox and Chernin Entertainment’s “Fear Street” trilogy, based on the novels by R.L. Stine. Leigh Janiak is helming all three films. Previously announced cast includes Gillian Jacobs, Sadie Sink, Emily Rudd, McCabe Slye, Kiana Madeira, Olivia Welch, Benjamin Flores Jr., Ashley Zukerman, Fred Hechinger, Julia [...]

  • MPAA Logo

    Motion Picture Association of America Hires Emily Lenzner as Communications Chief

    The Motion Picture Association of America has appointed veteran public relations executive Emily Lenzner as its executive VP of global communications and public affairs. She will report to Chairman and CEO Charles Rivkin and oversee the trade group’s communications team in the U.S. and internationally. Lenzner will start Aug. 1 and be based at the MPAA’s [...]

  • 'Cats' Teaser Trailer: See Taylor Swift

    Taylor Swift Unveils Feline Moves in 'Cats' Behind-the-Scenes Teaser

    Taylor Swift fans finally get to see some of the results of all those years spent studying her roommates Meredith and Olivia — and also, not incidentally, some time with a choreographer — in a new behind-the-scenes teaser for the movie “Cats.” The three-and-a-half-minute featurette has footage of Swift striking crouching feline moves as well [...]

  • CGR’s Immersive Premium Format Set for

    Immersive Theater Technology Set for US Debut in Los Angeles

    French multiplex company CGR Cinemas has selected the Regal LA Live as the first U.S. theater to use its Immersive Cinema Experience technology. The ICE format will be unveiled in the fall at the downtown location in a partnership between CGR and AEG. The companies made the announcement Wednesday but did not reveal which title [...]

  • Amazon Developing Original Series Based on

    Amazon Studios Buys 'Selah and the Spades,' Will Develop Original Series (EXCLUSIVE)

    Amazon Studios has acquired worldwide rights to “Selah and the Spades,” a gripping look at a prep school drug dealer, Variety has learned. The film marks the feature debut of writer and director Tayarisha Poe and had its world premiere at this year’s Sundance Film Festival where it was a favorite with critics. Amazon has [...]

  • The Ultimate Guide to 2019 Comic-Con

    The Ultimate Guide to 2019 Comic-Con Parties and Activations

    Hollywood is heading down the California coast to San Diego because It’s time for 2019 Comic-Con International. The annual cosplay celebration officially kicks off tomorrow, July 18, with a preview happening tonight. Here, Variety gives you a guide to this year’s parties and activations. Make sure to check back for updates. Wednesday, July 17Amazon Prime [...]

  • The Wound African Cinema Berlin Film

    Finance Forum Brings African WIP Into Focus at Durban FilmMart

    The 10th edition of the Durban FilmMart, which unspools parallel to the 40th Durban Intl. Film Festival, will feature 10 fiction and 10 documentary works-in-progress taking part in its annual Finance Forum. The leading co-production market on the continent, the Forum brings together producers, distributors, sales agents, broadcasters, funding bodies, and other industry players from across the [...]

More From Our Brands

Access exclusive content