Lionsgate Beats Wall Street Q1 Estimates On Starz Growth, ‘John Wick’ Receipts

The beat on total revenue was smaller, but significant, with the quarter's $963.6 million beating consensus of $962.6 million.
At the same time, talks were held recently with CBS over a potential acquisition of the premium brand. CBS reported strong second quarter results at the same time as CBS. Both companies could be asked about it during their respective conference calls with analysts.
The company's stock has been battered recently as it has managed through a period of uncertainty and a turnaround at the film division under Joe Drake. For Lionsgate, the quarterly performance should keep some of the bears at bay for the time being. In Thursday trading, it gained 5% to finish at $12.66 and added another 4% after hours.
Lionsgate cruised past Wall Street estimates for the fiscal first quarter, on strong subscriber growth at Starz and improved film results paced by the blockbuster returns of the third John Wick installment.
Domestically, Starz gained 400,000 streaming subscribers to reach 4.4 million. Globally and across all platforms, Starz is now at 26.5 million subscribers after adding 2.6 million compared with the year-ago period.
The independent company, which has pulled off several acquisitions of its own, has also been mentioned frequently as a potential takeover target.” />
On an adjusted, diluted basis, the company's loss of two cents exceeded analysts' consensus forecasts for four cents. Adjusted operating income of $67.3 million beat the forecast for $63.6 million.
The strategy at Starz, which Lionsgate acquired in 2016 for $4.4 billion, is a central feature of the Lionsgate story. The company has said it plans to invest heavily in the rollout of Starz streaming globally, targeting 20 million subscribers in five years.

Lionsgate Cruises Past Wall Street’s Q1 Estimates As Starz Notches Subscriber Gains, Expands In Europe

In June, as Deadline first reported, Damon Wolf came aboard as worldwide head of marketing, replacing the formerly bulletproof Tim Palen in a sign of corporate restlessness. The company has appeared to pull back a bit from its vocal assertions of its viability in the industry's ongoing M&A conversations, instead focusing on shoring up its business units, including the film operations being guided by returning executive Joe Drake.
Lionsgate soundly beat forecasts by Wall Street analysts for its fiscal first quarter, reporting a fully diluted loss of 4 cents per share of and total revenue of $932.7 million
Television Production revenue increased 7% to $279.4 million, with domestic license fees and international proceeds leading the charge, but profits in the segment fell 64% to $15.6 million.” />
Starz reported a sequential increase of 300,000 subscribers in the quarter ending June 30, recording gains in both traditional MVPD and OTT subscribers. Along with the financial results, the company also announced that it has entered agreements to launch StarzPlay branded channels in France, Italy and Spain, following previous launches in the UK and Germany.
Analysts had called for a loss of 7 cents a share and revenue of $885.1 million.
Motion Pictures segment revenues decreased by 23% in the quarter on tough comparisons with a year ago as profit decreased by 41% to $51.6 million due to higher theatrical marketing expenses. The quarter's film slate included solid, if not spectacular, performers such as Overboard and Uncle Drew, which fared better than the titles released theatrically in the comparable period a year ago but didn't throw off as much overall cash.
That quarter had included the surprising gains from the second John Wick installment and strong ancillary business for La La Land. The key metrics in the quarter ending June 30 represented a downturn from the year-earlier period, when the company reported earnings of 8 cents a share and revenue of $1.01 billion.
The company's shares have slumped since January, when the blockbuster momentum from Wonder and the swirl of dealmaking fascination with the company's status as an acquisition target kept them buoyed. Today, the stock closed at $23.15, more than 1% higher for the day but still 30% below the levels of that winning winter stretch. Investor sentiment has reflected this cooling trend.
With the 300,000 subscriber additions, the premium network stands at 23.8 million across platforms. Media Networks revenues rose 3% to $354.9 million due to OTT gains, though profits in the unit came in flat due to the cost of rolling out Starz internationally and domestic marketing spending.