Lionsgate demonstrated resilience in navigating the challenges posed by Hollywood strikes, exceeding Wall Street expectations for its second quarter of fiscal 2024.
The studio reported a revenue of $1 billion, marking a 14 percent increase compared to the prior year, and successfully halved its net losses to $886.2 million compared to the previous year’s analogous quarter.
The quarterly losses incurred by Lionsgate were primarily attributed to charges associated with its separation from multiplex movie network and streaming service Starz, which is expected next year. Executives acknowledged that while the film business exhibited robust performance, the television segment bore a greater impact from the industry strikes.
Lionsgate CEO Jon Feltheimer noted the company’s strong financial quarter, emphasizing a robust library performance and profit growth across film, television, and Starz businesses. Despite the negative impact of the strikes, Feltheimer reaffirmed the company’s guidance for the full year.
Feltheimer highlighted strategic moves, including the impending closure of the eOne acquisition to strengthen the studio business. He also outlined efforts to reorganize, restructure, and reduce overhead at Starz, aiming to position it as a profitable standalone entity.
Lionsgate’s revenues and adjusted per-share gain of $0.21 surpassed Zacks’ estimates, which had predicted revenue of $986.37 million and an adjusted loss of $0.03 per share. The per-share result also demonstrated improvement from the prior year’s adjusted per-share loss of $0.12. The company reported a diluted net loss to shareholders of $3.79, a significant improvement from the prior year’s figure of $7.95. The motion picture and TV production segments contributed to revenue growth, with a 21 percent increase to $789.8 million. Starz added 200,000 domestic subscribers during the quarter, according to the company.
Theatrically, Lionsgate benefited from the success of “Saw X,” which garnered positive reviews and surpassed $100 million worldwide on a $13 million budget. Despite anticipated strikes impacting the bottom line, the studio expressed optimism about resuming production soon, with notable projects in the pipeline, including a new “Now You See Me” film, Antoine Fuqua’s Michael Jackson biopic, and a long-anticipated “Highlander” reboot.
While 2023 showcased successful revitalization of key multimedia franchises, such as “John Wick: Chapter 4” and “The Continental,” the exception was “Expendables 4.” The television division received a boost from “The Continental,” with a 4.65 times increase in profits, despite a 9 percent decline in segment revenue to $393.9 million. The revenue drop was attributed to the strikes’ impact on episodic television, offset by strong profits from leasing the “From the World of John Wick” miniseries.