Lionsgate came in below Wall Street expectations for the first three months of the year, but its TV production division again had stellar results and its Starz streaming business kept on growing.
The company reported revenue of $929.9 million, up 6% year over year, while its net loss more than doubled to $104.6 million for the quarter ended March 31. That translated to adjusted net income of $13 million or adjusted earnings per share of 6 cents.
Starz’s global streaming subscriber base grew by 4.8 million for the quarter, to 24.5 million — up 47% from the year-earlier period.
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Wall Street analysts on average expected revenue of $961 million and adjusted earnings per share of 10 cents for the quarter, according to S&P Global Market Intelligence.
“Despite a very competitive and disruptive environment, I’m pleased to report a strong fourth quarter to close one of our best content building years as we continue to create significant long term value,” Lionsgate CEO Jon Feltheimer said in a prepared statement. “Our content creation strengths were evident across our businesses as our Television Group achieved record new series launches and current series renewals, our Motion Picture Group continued to add to a strong pipeline of branded properties and our library turned in another standout performance.”
Lionsgate’s Motion Picture segment revenue decreased by 1.5% to $288.1 million compared to $292.4 million in the prior year quarter. Segment profit decreased 19.6% to $49.5 million compared to $61.6 million in the prior year quarter. Revenue and segment profit trends were driven by the timing of P&A spend and certain content deliveries, partially offset by the continued strength of the film & television library.
Television Production segment revenue increased by 75.7% to $370.2 million compared to $210.7 million in the prior year quarter. Segment profit increased 263.7% to $33.1 million compared to $9.1 million in the prior year quarter. Revenue and segment profit increases were driven by continued growth in content deliveries. Lionsgate Television had a record 14 new shows picked up to series in the fiscal year and went 15-for-15 in current series renewed for additional seasons.
Media Networks segment revenue decreased 5.2% to $380.2 million compared to $401.0 million in the prior year quarter. Excluding revenue from the Pantaya streaming service in the prior year quarter, Media Networks segment revenue decreased 2.2% year-over-year due to reductions in domestic linear revenue, partially offset by growth in domestic streaming revenue and STARZPLAY International revenue. Segment profit decreased 23.3% to $33.0 million compared to $43.0 million in the prior year quarter, driven by the decline in domestic linear revenue. Total Media Networks global subscribers increased to 35.8 million including STARZPLAY Arabia, a non-consolidated equity method investee, driven by robust international and domestic streaming subscriber growth.
Lionsgate previously announced that it would look at spinning off or selling Starz, the premium cable network and streamer it acquired in 2016, as part of reducing its debt. Among the suitors are Roku and Apollo Group, which have teamed on a bid to acquire a minority stake in Starz.
Meanwhile, Lionsgate recently inked Pay 2 window movie output deals with Roku and NBCUniversal’s Peacock. Starz has the the Pay 1 TV window on Lionsgate releases, which will immediately be followed by a brief exclusive Roku Channel window, a Peacock exclusive window and then a second window on Roku Channel at a later date.
Last week, Lionsgate announced a pact with Great Point Studios, a studio investment/management company, and the New Jersey Performing Arts Center (NJPAC) to build a 12-acre production facility in Newark expected to begin operations in late 2024. The facility will be owned and operated by Great Point Studios; Lionsgate, as the long-term anchor tenant, will receive naming rights to the studio. In January, Lionsgate and Great Point Studios opened a $500 million studio facility in Yonkers, N.Y.