Lionsgate Shares Rise After TV Sales Propel Strong Fiscal Q2 Earnings

The stock price appreciated 5.7% post market as results in the September quarter handily beat the Street’s expectations. Lionsgate generated $20.78 million in net income, up from $505,000 in the period last year which included a $36.2 million loss to extinguish some of its debt. Revenues at $552.9 million were +10.9%. That was well ahead of the $518.7 million that analysts expected. And earnings at 15 cents per share surpassed forecasts for 11 cents.

Lionsgate’s “entire portfolio of businesses contributed to our solid results in the quarter, driven by a particularly strong performance from our television operations,” CEO Jon Feltheimer says. “It was a quarter in which we extended our franchises into new lines of business, continued to assemble a strong pipeline of new properties with great commercial potential and developed online platforms that will enhance our ability to deliver our content directly to the consumer.”

The Motion Picture operation saw revenues decline 8.4% to $398 million as The Expendables 3 and Step Up All In could not match last year’s quarter which included revenues from Now You See Me and a Spanish-language hit, Not Included. Within the unit, home entertainment fell 21.7% to $164.4 million. But television licensing revenues more than doubled to $69.4 million with pay-TV openings for The Hunger Games: Catching Fire and the broadcast debut of The Twilight Saga: Breaking Dawn – Part 1. International films – which don’t include Lionsgate U.K. – were down 14.8% with three wide releases vs. five in the period last year.

Numbers looked a lot better in Television Production: revenues increased more than 140% to $154.9 million. The company delivered 38.5 hours of domestic television series, vs. 11 hours last year, including Manhattan, Anger Management, Orange is the New Black, Houdini, Nashville, and Mad Men.

Stifel analyst Benjamin Mogil also noted that Lionsgate benefited from its investment in EPIX which “continues to be strong” and paid the studio a $2 million dividend. Received $2mn of dividends from EPIX in the quarter.

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