Lionsgate results hurt by weak movie slate; stock dips
The Santa Monica company told investors in late September that the box office underperformance of movies "Conan the Barbarian," "Warrior" and "Abduction" would cause it to lose more money than expected last quarter.
But investors still seemed at least mildly disappointed as Lionsgate reported that its revenue dropped 22% from the same period a year ago, to $358.1 million. The net loss was actually 7% smaller than a year ago, but that was driven by a onetime gain of $11 million on the sale of Canadian distributor Maple Pictures that came as the studio is attempting to shed itself of assets it deems no longer critical.
The studio's box office revenue plunged 71% during the quarter due to its poorly received movies, helping to push overall motion picture revenue down 36%, to $218.9 million. The studio saw a 15% boost in home entertainment revenue, to $175 million, however, largely from the sale of four previous seasons of the television show "Mad Men" to Netflix for nearly $900,000 per episode.
Lionsgate's small but growing television production business fared better, with revenue up 21%, to $139.2 million, as it delivered new episodes of programs including "Weeds," "Blue Mountain State" and Tyler Perry's "Meet the Browns."
Revenue from digital distribution of product from its extensive library of movies and television shows -- a business on which Lionsgate is counting for much of its future growth -- jumped 123% in the quarter, to $65 million.
Shares in Lionsgate were down 4%, at $8.38, Wednesday morning. Since dissident investor Carl Icahn sold nearly all his shares on Oct. 18, after abandoning his attempt to take control of the company and oust management, Lionsgate stock has grown steadily from $7.15. On Oct. 28 it surpassed $8 for the first time since 2008, indicating that fear of an Icahn takeover had been causing downward pressure on the share price.
-- Ben Fritz
Photo: Tom Hardy and Joel Edgerton in Lionsgate's "Warrior." Credit: Chuck Zlotnik / Lionsgate.