Lionsgate wasn’t immune from the summer box office slump which was reflected in soft quarterly earnings, although the company benefited from a strong performance from cable network Starz.
After markets closed Thursday, the mini-major studio reported $941 million in revenue and earnings of 30 cents a share for the three months ended September 30, which the company classifies as its fiscal first quarter. As Lionsgate closed its purchase of Starz during the fourth quarter of last year, direct comparisons to the prior year are not applicable.
“Our strong performance in the quarter keeps us on track for our fiscal year expectations, and our robust free cash flow is enabling us to continue our consistent deleveraging ahead of schedule,” Lionsgate Chief Executive Officer Jon Feltheimer said in a statement accompanying the earnings.
“Starz continued to report strong overall subscriber gains, with its direct to consumer offering leading the way. Our ability to leverage our strengths, mitigate risk and focus on segments where we can continue to win puts us on a strong, profitable growth path.”
Starz added 400,000 subscribers for its over-the-top service during the quarter, swelling its streaming base to 2 million. The company also announced it has entered into an agreement to bring its content to Hulu, further doubling down on internet TV.
Lionsgate released just four films in the three months ending in September, with Summit Entertainment’s “The Hitman’s Bodyguard” grossing more than $176 million worldwide. “American Assassin,” starring Michael Keaton and Dylan O’Brien, hauled in $61 million globally.
As a result, motion picture revenues fell 24 percent compared with the same time last year. Through November 5, Lionsgate ranked sixth out of all studios by market share, with 8.4 percent of the total domestic box office.
More recently, the company bolstered its film department, hiring Good Universe Co-Founder Joe Drake to serve as co-chair of its Motion Picture Group alongside Patrick Wachsberger.
Lionsgate’s TV production division also saw its revenue dip 5 percent year-over-year, but media networks made up for some of that, rising 7 percent on Starz’s success attracting more customers to its over-the-top streaming service.
The company will hold a conference call to discuss the earnings report at 5:30 p.m. ET.