Once again TV, not film, drives Lions Gate growth
Thanks to strong gains in its television production business, new revenue from its TV Guide Network and reduced movie marketing costs, Lions Gate Entertainment swung to $31.7 million in net income during its second fiscal quarter compared with a net loss of $51.8 million in the same period a year ago. Revenue rose just 3% to $393.7 million.
The movie and TV studio's overall motion picture revenue fell 11% to $277.1 million. That was driven in part by the fact that the company released only two movies in the quarter, compared with four a year ago. The drop benefited Lions Gate, however, by helping it lower theatrical marketing costs by 66%.
Home entertainment revenue was the biggest drag on the movie segment, plunging 25%. New DVD releases, including "Crank: High Voltage," "The Haunting in Connecticut" and "Horsemen" fell short of the studio's home entertainment slate in the same period last year.
The studio's TV business, on the other hand, continued to perform well, growing 30% to $88.9 million. The studio benefited from new episodes of its cable series "Weeds," "Mad Men" and "Crash," a 71% jump in revenue from its syndication unit Debmar-Mercury and an 80% jump in international TV sales.
Lions Gate Chief Executive Jon Feltheimer said the company is on track to "meet our financial targets for the year."While the studio's sixth installment of its long-running “Saw” movie series was not released in the quarter just ended, it was a big box office miss and is sure to ding Lions Gate’s next quarterly results.
The studio's newest big-screen debut, "Precious," a harrowing drama about the brutal home life of a teenage girl from Harlem, grossed an impressive $1.87 million opening this weekend at 18 theaters in four cities. The studio, wanting to capitalize on the film's strong word-of-mouth and Oscar buzz, will expand the picture's run beginning Friday and through the end of the month. If the movie, based on the novel "Push" by Sapphire, continues to draw audiences, Lions Gate could make a nice profit given that it paid just $5.5 million for the rights at this year's Sundance Film Festival.
Lions Gate stock closed up 6% at $5.41 today before earnings were released.
-- Claudia Eller
Photo: Mary-Louise Parker and Demian Bichir appear in "Weeds." Credit: Sonja Flemming / Showtime