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Lionsgate’s Motion Picture segment saw revenue nose up 3% to $40 million last quarter on more theatrical wide releases, but profit fell to $2.8 million as they underperformed, especially Borderlands.
“In a transitional, disrupted and difficult year for our industry, we reported disappointing financial results in the quarter,” said Lionsgate Studios CEO Jon Feltheimer. He said the results underscore “the need to adhere even more rigorously to the risk mitigated business models, slate diversification and strict financial discipline that have always served us well. The combination of a return to strong content slates, the continued stellar performance of our film and television library and sure-handed execution will put us back on the path to solid growth and shareholder value creation.”
The company also noted in its earnings release for the September quarter that about 8% of its eligible U.S. employees elected to take advantage of voluntary severance and early retirement packages it offered as it continues to streamline its business by adjusting to the economic realities of the marketplace.
There was no mention of what happens next.
Execs are hosting a call this afternoon at 5 pm ET. They’re likely to comment on a series of consecutive box office misfires from Borderlands to The Crow reboot to Never Let Go, The Killer’s Game, Megalopolis and White Bird. The financial hit varies — with Megalopolis, for instance, the studio was a distributor for hire. But it’s been a very public string and without some financial pain.
Lionsgate’s total company revenue of $948.6 million dipped from $1.01 million. Net losses narrowed to $163 million or 0.68 a diluted share, from $886 million.
The Studio Business, comprised of the Motion Picture and Television Production segments, reported revenue of $823.7 million, an increase of 4% from the prior year quarter. Studio operating loss was $34.8 million.
Television Production revenue increased 6% to $416.6 million while segment profit decreased to $24.4 million. Revenue growth was driven by higher series deliveries to STARZ, while segment profit was impacted by lingering effects of last year’s strikes in a heavily backloaded year.
Media Networks North American revenue of $343 million was comparable to the prior year, as higher ARPU was offset by lower subscribers. Segment profit decreased to $26.9 million on higher content amortization.
North American OTT subscribers declined 2.6% to 12.4 million compared to the prior year quarter while, on a sequential basis, North American OTT subscribers declined by 800,000.
Subscriber totals were impacted as expected in the quarter by the $1.00 price increase initiated for existing U.S. customers in the month of September. Management believes it will return to sequential OTT subscriber growth in North America in the December quarter.
Lionsgate and Starz are on track to split into two separate public companies by year end.
