The return of John Wick, its popular hit man franchise, helped lift quarterly earnings at Lionsgate, enabling the company to best expectations. For the three-month period ending on March 31, revenues at Lionsgate increased 16.7% to $1.1 billion. The company also reported an operating loss of $49.6 million, which was slightly better than the $50.4 million in losses it logged in the year-ago period. There was also a net loss attributable to Lionsgate shareholders of $96.8 million or 42 cents net loss per share. Adjusted net income attributable to Lionsgate shareholders in the quarter was $49.2 million or 21 cents in adjusted earnings per share.
Lionsgate’s film business did much of the heavy lifting. The studio segment reported revenue of $823.6 million, an increase of 25% from the prior-year quarter, with the movie portion of that haul increasing by 85%. That was due to the success of “John Wick: Chapter 4,” a blockbuster sequel starring Keanu Reeves as the titular avenger, as well as the release of two modest hits in the faith-based drama “Jesus Revolution” and the Gerard Butler action-thriller “Plane.” It also helped off-set declines in Lionsgate’s television business, which the company said was the result of “timing” of when its shows are licensed or hit the airwaves.
Segment revenue in Lionsgate’s media networks business, which includes Starz and its Lionsgate + streaming service, grew more modestly at 2.3% to $389 million. The company said lower marketing and distribution expenses, as well as a decrease on its content spending had helped improve profitability. Total global streaming subscribers increased by 1.3 million, with 700,000 of those signing up domestically.
Lionsgate’s revenue beat Wall Street’s estimates of $994 million, while adjusted earnings per share also was better than consensus estimates of a loss of 9 cents per share. The company’s stock rose more than 3% in after-hours trading on the strength of its earnings results.
The report comes as Lionsgate is looking for ways to separate its studio business from Starz, the cable and streaming company it purchased in 2016 for $4.4 billion. At the time, the company was hoping to get bigger to compete with larger media conglomerates such as Disney, which later bought much of 21st Century Fox, and Time Warner, which has been through two major mergers before re-emerging in its latest incarnation as Warner Bros. Discovery. In February, Lionsgate’s leadership said it expected to cleave Lionsgate from Starz by September.
More to come…