Analysts didn’t expect much from the September quarter which included disappointing box office results from American Ultra — and promotional costs for Sicario and The Last Witch Hunter. But Lionsgate delivered even less than they envisioned.
Shares plummeted more than 9% in initial post market trading, and seemed to settle around -6%, after the studio reported a net loss of $42.1 million — down from a $20.8 million profit in the period last year — on revenues of $476.8 million, down 13,8%. Analysts predicted revenues of $491.0 million. The loss of 28 cents per share, or 19 cents with adjustments, contrasts with expectations for a 3 cent profit.
“Although this quarter will be the lightest of the year due to timing and softer-than-anticipated performance of some of our recent film releases, our robust film and television pipelines position us for a very strong second half of the year,” CEO Jon Feltheimer says.
Lionsgate says its fiscal Q2 numbers were hurt by “the timing of episodic television deliveries.” In addition, American Ultra “underperformed,” and Witch Hunter — released after the quarter ended — required a $7.2 million write down. The studio spent about $7 million in the quarter to market Witch Hunter.
The weakness in the September quarter sets Lionsgate up for a snap back in the December quarter which will include Sicario revenues as well as results from its expected blockbuster The Hunger Games: Mockingjay — Part 2, out November 20.
Lionsgate seemed to signal its optimism by increasing its quarterly dividend by 29% to 9 cents a share.
Motion Picture revenues fell 11.1% to $354.0 million with just two September quarter theatrical releases: Ultra and Shaun The Sheep. Home entertainment revenues were down 6.6% to $153.5 million with fewer wide release titles than the studio released last year.
Television revenues within the Motion Picture unit fell 13.7% to $59.9 million. And international motion picture sales were off 4.5% to $107.8 million.
Television production also was down, dropping 20.7% to $122.8 million. Lionsgate says that it expects improvements in the second half of its fiscal year with deliveries of Orange Is The New Black, Nashville, and The Royals.
Lionsgate executives will hold a conference call with analysts tomorrow morning to discuss earnings and plans.