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Lionsgate Misses on Earnings Despite Best-Ever Quarter for Domestic Streaming Growth

Film revenues plummeted to $257.6 million due to theater closures brought on by the pandemic

Lionsgate missed on its second-quarter earnings on Thursday despite reporting its best-ever quarter for its domestic streaming growth for STARZ.

Lionsgate, which announced layoffs of 15% of its global motion pictures group on Thursday morning, reported a revenue of $745 million (down from the $983.5 million Lionsgate reported during the same quarter a year ago) although analysts had estimated its revenue around $760.42 million for the quarter ending in September. The company also reported a loss of 8 cents per share, although analysts following the stock via Yahoo Finance had expected Lionsgate to report a loss of 3 cents per share.

The media and entertainment company reported a net income attributable to shareholders of $18.4 million, down from a $1.8 million profit the year prior.

However, STARZ reported its best domestic subscriber quarter growth ever, with subscribers increasing from 7.4 million to 9.2 million in the prior sequential quarter. The company’s global OTT subscribers increased by 2.3 million to 13.7 million total.

Lionsgate in its release on Thursday said revenue for the motion picture business declined to $257.6 million due to theatre closures because of the coronavirus pandemic — but PVOD and home entertainment platforms partially offset that revenue, where profit grew 63% to $83 million. The company reported a strong performance from its film and TV library (touting 17,000 film and TV titles), with revenue totaling $166.7 million in the quarter.

“We’re pleased to report another strong quarter, including record over-the-top subscriber growth at STARZ both domestically and internationally,” Lionsgate CEO Jon Feltheimer said.  “Together with the resumption of film and television production and another great revenue performance from our library, it added up to a quarter that reflected strong financial results, acceleration of our key non-financial metrics, and affirmation of the business plan we created four years ago with the acquisition of STARZ and our pivot to the streaming world.”

TV production sales fell from $274 million to $197.2 million from the same quarter last year, while profits equaled to $9.9 million compared to $12.6 million in the prior-year quarter, which is due to production schedules and delivered TV episodes.

The media networks segment revenue increased by 3.8% to $388.3 million from the same quarter last year, while the segment’s profit was $92.9 million, driven strongly by the strong domestic subscriber growth and increased revenue from STARZPLAY International.