Lionsgate Reports Lower First-Quarter Earnings, Revenues

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The studio, led by CEO Jon Feltheimer, beat analyst profit estimates as it reported international TV revenue growth.

Lionsgate on Thursday reported lower first-quarter earnings and revenue.

The studio, led by CEO Jon Feltheimer, posted earnings at $40.7 million for the three months ending on June 30, 2015, compared to a profit of $43.3 million for the year-ago period. Quarterly revenue for Lionsgate was $408.9 million, down from a year-ago $449.4 million.

Lionsgate beat the consensus estimate for earnings during the latest quarter with a diluted 26 cents per share, well ahead of the street estimate at 7 cents. The reported EPS for the same quarter last year was $0.27. The studio missed on the analyst revenue estimate of $430.4 million.

The overall motion picture segment revenue for the first quarter was $275.4 million, down from a year-earlier $331.9 million.Theatrical revenue fell $23.1 million as the studio reported only one wide release during the latest frame, The Age of Adaline, for which it only recorded a theatrical distribution fee.

Lionsgate, which recently signed a film financing pact with Hunan TV, said it expects another 13 wide releases during the rest of fiscal 2016. That slate will include The Hunger Games: Mockingjay Part 2 in November, Allegiant — Part 1, The Last Witch Hunter and Sicario.

Lionsgate's home entertainment revenue from motion picture and TV production also fell to $129.5 million, against $141 million in the first quarter of fiscal 2015. TV revenue in the motion picture segment came to $48.4 million, down from $58.8 million in the prior year when Lionsgate released The Hunger Games: Catching Fire.

Elsewhere, the international motion picture segment revenue came to $84.8 million during the latest quarter, against a year-earlier $90.7 million. On the TV side, production revenue rose 14 percent to $133.6 million, driven by a 73 percent rise in international TV revenue after licensing the first three seasons of Orange Is the New Black.

Feltheimer, in a statement on Thursday, pointed to "robust free cash flow" underpinning the studio's balance sheet. "We believe that we're exceptionally well positioned to use the depth of our film and television pipelines, our natural advantages as a global content company with few legacy constraints and the strength of our capital structure to continue moving quickly and opportunistically in a dynamic and disruptive industry environment," he added.

Stock in Lionsgate on Thursday closed down $1.99, or 5.4 percent, to $35.41 on the New York Stock Exchange. Feltheimer and other senior studio execs will discuss their latest financial results with analysts on Friday morning.

August 6, 4:35 p.m. Updated with additional detail on Lionsgate's first quarter financial results.

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