Lionsgate punched through Wall Street forecasts, reporting a jump in revenue to $1 billion last quarter on a record $845 million in sales from its hefty film and television library.
The company said Thursday that it swung to a net profit of $16.6 million, or 7 cents a share — 26 cents adjusted – for the fiscal third quarter ended in December, from a loss of $45 million the year before. The studio is prepping for some big film releases this year — John Wick: Chapter 4 and Hunger Games prequel Ballad of Songbirds & Snakes — as the box office normalizes and amid a split of the studio business and Starz. CEO Jon Feltheimer said today that separation process is still on track for September.
Lionsgate shares popped in late trading following the numbers.
During the quarter, “as part of our global assessment and curation of our Media Networks cost structure and content strategy,” the company said, it took an $80.8 million restructuring charge for removing series from Starz. No details, but Starz canceled its Dangerous Liaisons’ Season 2 renewal and period freshman series Becoming Elizabeth last fall.
“We reported a strong financial quarter with record trailing 12-month library revenues affirming the value of our intellectual properties,” Feltheimer said. “We enter our fourth quarter with encouraging signs across all of our businesses: a rebounding domestic box office just as we bring our biggest slate in years to theatres; renewals of six key Lionsgate Television series during or immediately after the close of the quarter; and improved Starz economics due to its international reorganization.”
The previous quarter had seen a hefty $1.8 billion in Starz restructuring charges and write-downs.
Subscribers totaled 35 million – 10.2 million linear and 25.9 million OTT. Starz domestic streaming subs of 11.6 million were softer, down from 12.3 million in the previous quarter on fewer originals. Execs said domestic OTT subs have already ticked up in the current quarter.
Media Networks segment revenue of $380 million was down from $389 million in the prior year as domestic streaming revenue and Lionsgate+ (previously Starzplay International) was offset by lower domestic linear revenue as that side of the business continues to be in secular decline.
Profit jumped to nearly $50 million from $28 million in the prior year quarter, driven by lower domestic marketing costs and an improved international cost structure.
The studio — motion picture and television production — saw sales rise 25% to $894 million and profits surge more than 70% to $148 million. The year-over-year increase in revenue and segment profit was driven primarily by strong library sales and the timing of scripted content deliveries.
Motion picture revenue rose 5% to $289 million. Profit increased by 13% to $76.5 million. In TV production, revenue rose 38% to $605 million and profit nearly tripled to $71.5 million driven by growth in content deliveries to media networks and third parties as well as strength in library sales.
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