Lionsgate came in above market expectations once more as it reported results for its fiscal fourth quarter Thursday. It topped $1.1 billion in revenue, a 17% year-to-year jump, a net loss of $96.8 million, and adjusted net income of $49.2 million or 21 cents per share.
Analysts surveyed by Zacks Investment Research predicted $974.9 million in revenue for the quarter and a penny in earnings per share, versus a quarterly loss of 6 cents per share a year ago.
The stock closed Thursday at $10.17, nearly tied with its $10.98 share price a year ago but below the 52-week high of $11.96. Shares rose 2% after hours to $10.40.
“I’m pleased to report that we ended the fiscal year with another strong quarter,” said Lionsgate CEO Jon Feltheimer. “Our content businesses performed well, our library again achieved record trailing 12-month revenue, and Starz continues to be profitable while growing subscribers and executing successfully on its bundling and packaging strategy. We enter Fiscal 24 with strong earnings momentum and all the elements in place for strong growth.”
Making movie money
Motion Picture segment revenue increased by 85% to $532.1 million compared to $288.1 million in the prior year quarter. Segment profit increased by 89% to $93.8 million compared to $49.5 million in the prior year quarter.
Wall Street’s optimism three months ago was tied to the studio’s comparatively strong theatrical slate, and the results mostly bore that out. “Jesus Revolution” and “Plane” were modest hits, with the latter Gerard Butler/Mike Coulter actioner spawning a sequel. Meanwhile, “John Wick: Chapter 4” soared past $431 million worldwide, becoming Hollywood’s biggest R-rated release since “Joker” topped $1 billion in late 2019. However, only a week’s worth of that box office came in for the newly reported quarter — it debuted globally with $138 million and had passed $245 million worldwide by the end of its second weekend — since the movie opened on March 24.
Some of Lionsgate’s tentpole slate this year is from existing franchises like “Saw X,” “Expendables 4” and “The Hunger Games: The Ballad of Songbirds and Snakes.” However, the studio was able to craft new or new-to-cinema franchises like “Now You See Me,” “The Hitman’s Bodyguard,” “Wonder” and “Knives Out” throughout the 2010s while most of the industry was trying to expand existing franchises into cinematic universes and turn previous hits into monetizable franchises.
This year’s Gerard Butler/Mike Coulter actioner “Plane” has already scored a sequel in development. And “Jesus Revolution” further affirmed Lionsgate as the biggest mainstream studio for faith-based theatricals.
Production returns
The good news also came courtesy of several Lionsgate television shows getting renewals, among them CBS’s quite popular “Ghosts,” Starz’s “Minx” (whose second season was dropped by HBO Max before being picked up by Starz), Netflix’s “Selling the OC,” Starz’s “Power Book II: Ghost,” with newbie “Extended Family” set for next season.
While not a factor this quarter, all parties hope that Lionsgate’s television division will end the year with a bang courtesy of the three-part “John Wick” prequel TV movie event “The Continental.” Meanwhile, Starz reported domestic subscription growth of 700,000.
There is now less pressure on smaller studios like Lionsgate to position themselves to get sold, as a change in investor priorities now puts emphasis on profits and revenue over content spending and beefing up streaming libraries. That said, revenue from Lionsgate’s 18,000-title film and television library increased to a record $884 million for the trailing 12 months.
However, the mini-major now has to stand on its own two feet alongside the metaphorical giants — especially after the company completes a planned split of its Starz network from the studio.
