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Lionsgate on Thursday reported sharply lower third-quarter earnings and revenue.
The studio, led by CEO Jon Feltheimer, posted earnings at $35.5 million for the three months ending Dec. 31, 2015, compared to a profit of $98 million for the year-ago period.
Lionsgate reported “softer than anticipated” performance at the multiplex for its movie releases. The Hunger Games: Mockingjay, Part 2 grossed $650 million worldwide, but its box office was lower than Mockingjay, Part 1 and cost more to produce.
Quarterly revenue for Lionsgate was $670.5 million, down from a year-ago $751 million. The studio reported earnings per share at 27 cents in the third quarter of fiscal 2015, against per-share earnings of 66 cents in the same quarter last year.
That missed analysts’ estimates of a profit of 54 cents per share in the current quarter. Overall motion picture segment revenue for the quarter was $505.8 million, compared to $590.1 million in the year-ago period.
Theatrical revenue of $183.1 million was just down from $186.4 million in fiscal 2015, even as margins fell due to theatrical P&A expenses incurred for four wide film releases in the current quarter, compared to two wide film releases in the third quarter last year.
Lionsgate’s home entertainment revenue from motion picture and TV production came to $142 million, compared to $183.1 million in the year-ago period. TV revenue in the motion picture segment also fell to $48.6 million, compared with $82.9 million in the prior-year quarter due to the timing of TV window releases.
The Hunger Games opened in its network TV window in the third quarter of 2015. During the latest quarter, TV production revenue was $164.7 million, just up from a prior-year $161.2 million.
“With our television business continuing its robust topline and margin growth, a deeper and more diversified film slate with lower costs and contributions anticipated from recently launched businesses, we have a clear path to resume our strong and sustainable financial trajectory in fiscal 2017,” Feltheimer said in a statement.
The latest financial results came as Lionsgate confirmed it has restarted possible merger talks with Starz. Feltheimer and other senior studio execs will hold an analyst call on Friday morning to discuss their latest financial results.
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