Studio reports net loss of $64.1 million — hit by theatrical marketing costs, killed by Kutcher's “Killers”
Lionsgate said on Monday that it lost $64.1 million during its fiscal 2011 first quarter, with overall revenue driven down, in part, by a declines in home entertainment revenues — a result of producing fewer theatrical films last year — and higher marketing costs to promote three wide releases.
The studio also attributed the rough quarter to the “underperformance” of “Killers” starring Ashton Kutcher.
Overall revenue was $326.6 million for the quarter, a decline of about 14 percent. Its adjusted net loss was $13.7 million, compared to a $53.4 million profit during the same quarter last year.
Liongate’s $64.1 million net loss was “attributable primarily to an increase of $71.2 million in theatrical marketing costs” for three wide releases — "Killers," "Kick Ass" and “Tyler Perry's Why Did I Get Married Too?” — in the quarter, compared to just one wide release (“Crank 2: High Voltage”) last year.
The studio’s motion picture revenue — at $272.7 million — was unchanged, and that included the $71.3 million in theatrical revenues generated at the box office.
Lionsgate's home entertainment revenue — $117.1 million — slid 22 percent on a smaller 2010 (fiscal) slate.
Television revenue increased 46 percent (to $30 million) from strong pay television releases, including “Rambo.”
Revenue from Lionsgate-owned Mandate Pictures fell 75 percent to $13.3 million, and the studio attributed to the timing of its slate compared to last year’s fiscal first quarter, which included “Drag Me to Hell” and “Juno.”
Lionsgate co-chair and CEO Jon Feltheimer singled out "Killers," but remained optimistic about the upcoming slate.
"Our first quarter was affected by marketing costs for our three wide releases, timing of television deliveries and the underperformance of our theatrical release ‘Killers,’" Feltheimer said in a statement accompanying the release. "With our upcoming theatrical slate, beginning with this Friday's opening of ‘The Expendables,’ and the continued strength of our television, library and channel businesses, we remain poised to achieve our full year financial targets."
The earnings release did not address the latest hostile takeover bid by Carl Icahn and his Icahn group. Last week, Lionsgate’s board rejected Icahn’s offer of $6.50 per share.
Icahn has been aggressively trying to wrangle control of the indie studio for months. His latest lob is set to expire on August 25.
Lionsgate has a quarterly earnings call scheduled for Tuesday morning.