Lionsgate exceeded Wall Street forecasts for revenue in its fiscal second quarter, racking up $901 million, but saw profits hurt by charges related to shareholder litigation.
On an adjusted diluted basis, earnings per share came in at 22 cents, which was also better than Wall Street estimates. But a net loss in the period, minus the adjustment, included $114.1 million in charges related to shareholder litigation settlements, with $54.8 million being a previously disclosed settlement of fiduciary litigation.
Between mid-July and late-August of 2016, seven class-action suits were filed against the company over its acquisition of Starz. The actions were later consolidated by the Delaware Chancery Court. The complaints pointed to close ties between the parties, which allegedly tainted the transaction and enriched former board member John Malone at shareholders’ expense.
Starz once again provided a bright spot in the period, adding 1.3 million subscribers compared with the first quarter, bringing the premium network to 25.1 million subscribers in the U.S.
The network is also expanding internationally. Along with the financial results, the company announced that StarzPlay would be available in the UK for Virgin TV customers for £4.99. Original series will launch simultaneously in the U.S. and the UK.
Starz’s growth propelled a 5% overall gain in Media Networks unit revenue, which the company attributed to strong growth in subscribers to OTT platforms. Profits in the segment increased 19% from the prior-year quarter to $122.7 million.
The Motion Picture unit, which has been regrouping over the course of the year under the direction of Joe Drake, saw revenues decrease by 2% to $379 million.