Lionsgate Beats Quarterly Forecasts, Says Starz Will Focus On U.S., UK And Canada, Exiting Latin America Exit By End Of Year
Lionsgate beat Wall Street analysts’ forecasts for the first quarter of its fiscal 2024, with revenue climbing 2% as the company’s library posted more robust results.
The company also said after the June 30 end of the quarter it had decided that Starz would focus on the U.S., UK and Canada, exiting Latin America before the end of the year. Over the past few years, during a different operating climate, the premium cable and streaming programmer had set ambitious global expansion plans but has reined them in more recent times. Starz is slated to split from the company’s studio business in the coming weeks.
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Total revenue of $909 million came in well ahead of estimates for $885 million, while an adjusted loss per share of 4 cents beat expectations for a loss of 23 cents.
Library film and TV titles have generated $896 million over the past 12 months, the company said, and gave a boost to the quarterly numbers.
Lionsgate’s recent acquisition of eOne for $500 million came after the June 30 end to the quarter.
The company is marching toward a major transaction, as the film and TV studio will soon be separated from Starz and its linear and streaming platforms. The maneuver, projected to be completed by the end of September, will need to be approved at a special shareholder meeting later. It has been a prolonged process to arrive at a strategic plan as the management team looks to unlock value for both parts of the current company. The split would give both the studio and Starz separate public market valuations and stock to use as currency — and make both easier acquisition targets.
The Media Networks division had flat revenue of $381.1 million, with domestic streaming and international revenue offset by lower domestic linear revenue. Starz added 100,000 streaming subscribers from the prior quarter on a pro forma basis.
The Studio unit, which now includes both film and TV divisions, saw a 12% dip in revenue to $625 million, while profit gained 31% from a year ago to $92.1 million.
Motion Picture revenue increased by 46% to $406.5 million, with the company crediting strong box office and home entertainment results from John Wick: Chapter 4 as well as multi-platform releases like Sisu.
Television Production segment revenue fell nearly in half, to $218.5 million from $432.3 million in the prior-year quarter, while profit increased 17% to $22.9 million. The company cited a tough comparison with last year’s higher-than-normal content deliveries, while profit growth stemmed from favorable year-over-year comparisons in television syndication.
On their last quarterly earnings call, Lionsgate execs said a WGA strike lasting as long as the 2007-08 one would have a limited impact on the company’s results. Now that the SAG strike has been combined with the writers walkout, with today marking 100 days of the writers being off the job, the picture could be changing for Lionsgate and other content companies in the weeks ahead.
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