Lionsgate Stock Surges as CEO Touts Bigger Film Slate, TV Production Growth
The Hollywood studio will continue to "find franchises, doing it with our model, being a little edgier, a little more innovative," CEO Jon Feltheimer told analysts, touting 'Power Rangers' as an example of a planned franchise.
Shares of Lionsgate Entertainment soared Thursday following a better-than-expected earnings report and as CEO Jon Feltheimer reassured investors by touting moves to diversify the studio's film slate and continue growing its TV production arm.
"We're going a little bit back to our roots, continuing to find franchises, doing it with our model, being a little edgier, a little more innovative," Feltheimer told analysts during a conference call. "I think those are things that made it work for us. And I think you'll certainly see that in 2017."
He spoke as shares in the studio rose 11 percent in early trading on the New York Stock Exchange. As of 10:50 a.m. ET, the stock was up 7.8 percent at $21.30.
Feltheimer on Thursday also talked about Lionsgate as a possible takeover target after Comcast's NBCUniversal recently scooped up DreamWorks Animation and China's Wanda acquired Legendary Entertainment.
What the DreamWorks deal "really speaks to, and Legendary as well, is that the value of those companies was not necessarily the revenue stream, or the profitability from those businesses, but the development of franchises and brands that can play across multiple platforms and revenue streams," he said in response to an analyst's question. "That's what we're concentrating on. We continue to ... develop and acquire and mine great franchises and great brands."
Lionsgate after the market close on Wednesday released fourth-quarter results that beat Wall Street expectations.
Feltheimer on Thursday had to convince analysts that the stock can continue to gain after a disappointing run in the last six months. His overtures included a mea culpa over the fiscal 2016 film slate and its misfires, which included Gods of Egypt doing better internationally than at home, and Allegiant disappointing at the box office.
"Maybe we rushed the third movie a bit, instead of taking our time with it,” the exec said of Allegiant as part of the Divergent series. But looking ahead to the fiscal 2017 film slate, Feltheimer talked of an overall movie offering that's "bigger, more balanced and more cost-efficient than last year."
He pointed to the upcoming Power Rangers release, which "we’re really, really excited about — it’s looking great ... we could see us doing five or six or seven of them."
Feltheimer also touted the continuing growth of Lionsgate's TV production division, which posted record fourth-quarter revenue. Lionsgate's TV group head Kevin Beggs told the analysts call that the studio was discussing a new home for Nashville with around five unnamed platforms. "We're confident about finding a new home for Nashville," he said.