Lionsgate reported on Thursday that its motion picture business posted a much better third quarter compared with last year thanks to the strong box office performance of Rian Johnson’s murder mystery flick “Knives Out.”
The media and entertainment company reported overall revenue of $998.5 million for the third quarter, which was above the $944.1 million that analysts tracked by Yahoo! Finance had been expecting. Lionsgate’s fiscal 2019 third-quarter revenue was also an improvement compared with the $933.2 million in revenue the company reported during the same three-month period last year.
Despite the revenue growth in the quarter, Lionsgate reported a net loss attributable to shareholders of $91.2 million, or a loss of 42 cents per share. During the same quarter a year ago Lionsgate reported net income of $20.1 million, or 10 cents per share. The company said in its quarterly report to investors that on an adjusted basis that it actually had earnings of 14 cents per share. Analysts via Yahoo expected Lionsgate to report a loss of 13 cents per share.
Adjustments such as this are typically accounting ways to recognize various charges within the quarter. Lionsgate took a write-down of programming costs at Starz after the departure of Chris Albrecht, as the programming strategy shifted.
The company’s film division experienced growth in the quarter, hitting $437.9 million, which was up compared to the $362.6 million the film arm reported during the same quarter a year ago. The growth, Lionsgate said was mainly due to the strong performance of “Knives Out.”
The motion picture division also posted a profit of $49 million in the quarter.
“Our Motion Picture Group turned in a strong performance in the quarter, led by the worldwide box office success of ‘Knives Out,’ while our Television Group secured a number of important scripted series and pilot commitments and Starz continued to grow its over-the-top platform worldwide,” Lionsgate CEO Jon Feltheimer said in a statement. “Our STARZPLAY international rollout remains on track to achieve financial and subscriber targets that we expect to translate into meaningful incremental value creation.”
Lionsgate’s media networks division saw revenue increase more than 4% from the prior year to $382.4 million in the quarter while networks profit declined 24% to $102.1 million. Lionsgate said the drop in profit was due to the company’s investment in STARZPLAY International, which is expected to see subscriber growth to between 15 and 25 million over the next five years.
The media networks’ streaming businesses saw revenue increase to $8.7 million, up from $4.7 million.
The TV production segment at Lionsgate reported a loss of $5.7 million, primarily due Lionsgate said to the timing of production schedules and episodic deliveries, including development costs and deficits for new series. Revenue for TV production was $189.4 million.