Lionsgate weathered the Hollywood strikes well enough to top Wall Street estimates for its second quarter of fiscal 2024, with the studio recording revenue of $1 billion, up 14%, and managing to trim its net losses by more than half to $886.2 million from last year’s similar quarter.
The company said its quarterly losses were related mostly to charges from its separation from STARZ. But executives said that Lionsgate’s film business had performed better, with its television segment suffering more impact from the strikes.
Lionsgate’s revenues of $1 billion and adjusted per-share gain of $0.21 topped estimates from Zacks, which predicted revenue of $986.37 million and an adjusted loss of $0.03 per share. The per-share result also improved from last year’s adjusted per-share loss of $0.12.
“We had a strong financial quarter with another robust library performance and segment profit growth across our film, television and STARZ businesses,” said Lionsgate CEO Jon Feltheimer. “We are reaffirming our guidance for the full year, even with the negative impact of the strike.”
Feltheimer said Lionsgate was moving to close its eOne acquisition, which “will strengthen our studio business on a standalone basis.” He added that the company’s STARZ reorganization, restructuring and overhead reduction “reflect our focus on preparing the service to thrive as a profitable and successful standalone company.”
Lionsgate’s recorded a diluted net loss to shareholders of $3.79, less than half of the diluted net loss of $7.95 last year. The net loss of $886.2 million was an improvement from a net loss of $1.81 billion in the prior year period.
The motion picture and TV production segments reported revenue of $789.8 million, an increase of 21% from the $654.9 million earned in the prior year’s second quarter. Meanwhile, Starz gained 200,000 domestic subscribers during the quarter.
In terms of theatrical, Lionsgate benefited from the robust earnings of “Saw X,” which nabbed the best reviews in the 19-year-old horror franchise along with topping $100 million worldwide on a $13 million budget.
While the SAG-AFTRA and WGA strikes are expected to impact Lionsgate’s bottom line by about $15 million throughout 2024 and 2025 (beyond the already-accumulated $30 million in strike-related losses), the studio is optimistic it can begin production as early as next week. Among the major projects on tap are a new “Now You See Me” film, Antoine Fuqua’s Michael Jackson biopic and a long-gestating “Highlander” reboot.
Thus far, 2023 has been a pretty decent year in terms of Lionsgate revitalizing its biggest multimedia franchises. “John Wick: Chapter 4” provided $440 million at the global box office while inspiring a three-part movie event “The Continental” which debuted on Peacock (in North America) and Amazon’s Prime Video (in other overseas territories) last quarter, and the upcoming “The Hunger Games: The Ballad of Songbirds and Snakes” arrives theatrically next week. “Expendables 4” is the exception to the rule.
“The Continental” provided a boost to the television division, even as segment revenue decreased 9% to $393.9 million. Profit soared to $63.2 million. That compares to $13.6 million in profits in the second quarter of 2022, a 4.65x increase.
The revenue drop was due to the strikes’ impact on episodic television, while the cash-in-hand earned from leasing the three-part “From the World of John Wick” miniseries accounted for strong profits.
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