Lionsgate beats estimates with $909 million in Q1 revenue

Lionsgate came in above market expectations once again as it reported results for its first quarter of fiscal 2024 Thursday. The Santa Monica-based studio reported first-quarter revenue of $909 billion. That is +1.6% from $893.9 million this time last year and down 11% from the $1.1 billion posted in the previous quarter.

Zacks predicted revenue of $893 million and an adjusted loss of $0.24 per share. The company posted an adjusted OIBDA of $85.7 million, which was up significantly in year-to-year comparisons and walloped predictions of $28 million.

Meanwhile, the adjusted EPS net loss of 4 cents per share beats Zacks’ estimates as well. The studio reported a net loss figure of $70.7 million, with an adjusted net loss of $9.8 million.

“I’m pleased to report a strong financial quarter with another record library performance,” said Lionsgate CEO Jon Feltheimer. “We continued to execute our strategic agenda culminating in our signing a definitive agreement with Hasbro last week to acquire global entertainment platform eOne. The acquisition checks off all the boxes by adding thousands of titles to our library, growing our portfolio of brands and strengthening our scripted and unscripted television business.”

Lionsgate had no major theatrical releases from April to June quarter. Holdover business from the $430 million-grossing “John Wick: Chapter 4” (which opened on March 24) helped the motion picture division. This quarter in 2022 offered only the $29 million-grossing Nicolas Cage comedy “The Unbearable Weight of Massive Talent.”

The overall motion picture division increased by 46% to $406.5 million in revenue compared to $278.8 million in the prior year quarter. Segment profit increased by 37% to $69.2 million compared to $50.5 million in the prior year quarter.

Most of Lionsgate’s slate this year comes from existing franchises like “Saw X,” “Expendables 4” and “The Hunger Games: The Ballad of Songbirds and Snakes.” Thus far, none of these films have been delayed amid the WGA and SAG-AFTRA strikes. This year’s Gerard Butler-Mike Coulter actioner “Plane” – for which the studio trumpeted strong post-theatrical business — has already scored a sequel in development.

The TV production segment revenue decreased to $218.5 million compared to $432.3 million in the prior year quarter. Segment profit increased 17% to $22.9 million compared to $19.6 million in the prior year quarter. Revenue reflected last year’s higher-than-normal content deliveries, while the segment profit growth was driven by favorable year-over-year comparisons in television syndication.

Lionsgate recently agreed to buy the Entertainment One studio business from Hasbro for $500 million. Whether eOne proves a worthy investment — we’ll see if audiences desire a “Monopoly” movie — the price appears to be a bargain compared to the $3.8 billion Hasbro paid for it.

With the deal, Lionsgate is positioning itself as a studio that buys assets and doesn’t just wait to get bought, even as it continues with its plan to spin off the Starz cable and streaming business. That spin is expected to occur by the end of September.

News on Tuesday of a multiyear licensing deal for “The Conners” serves as a reminder that studios can still make money the old-fashioned way even amid a streaming-focused era. Lionsgate hopes to end their television year with a bang with the upcoming release of the three-part “John Wick” prequel TV movie event “The Continental.”

The stock closed Wednesday at $7.54, down 25.8% from the $10.17 level it closed at prior to the previous quarter’s earnings. The stock fell another 5% in after-hours trading following the earnings release. The Wrap