Lionsgate Posts Q2 Loss on Box Office Duds
The mini-studio posted a slightly lower loss than projected after recording an $11 million gain on the sale of Maple Pictures.
TORONTO – Lionsgate Entertainment on Wednesday posted sharply lower second quarter revenue and a narrowed loss due to box office duds and the timing of DVD releases.
The Vancouver-based mini-studio posted a loss of $24.6 million for the three months to September 30, just down from a loss of $29.7 million in 2010.
Revenue fell sharply to $358.1 million, against a year-earlier $456.32 million.
Lionsgate earlier warned it stood to lose between $40 million and $50 million in Q2 on poor box office from Conan the Barbarian, Warrior and Abduction.
The indie producer’s overall motion picture revenue in the second quarter fell 36 percent to $218.9 million, with theatrical revenue down 71 percent to $22.3 million.
But Lionsgate managed to shore up its bottom line by recording a gain of $11 million from the sale of Maple Pictures and securing higher equity interest income from its stake in EPIX.
The mini-studio also saw gains in its TV and digital businesses.
"Although we were disappointed by the performance of our films in the quarter, we were pleased with the strong and growing contributions of all of our other core businesses," Lionsgate co-chairman and CEO Jon Feltheimer said in a statement.
"We believe that our film performance will improve significantly and become more consistent as we release some of the potential franchise films on our upcoming slate, and our television and digital businesses and EPIX channel partnership will continue their strong and profitable growth trajectory,” he added, with an eye to the upcoming Hunger Games theatrical release in early 2012.
Lionsgate posted sharply lower overall revenue as it released only two major theatrical titles on DVD during the latest quarter, against three DVD titles released in the same period of 2010, while last year’s theatrical release slate included the top-grossing The Expendables.
The mini-studio also went without revenue from Maple Pictures after selling the Canadian distribution unit to Alliance Films.
The theatrical release losses in Q2 were offset by Lionsgate's home entertainment revenue from both motion pictures and TV rising 15 percent to $175 million, with the first four seasons of Mad Men streaming on the Netflix digital platform.
And home entertainment releases of Lionsgate TV shows reached a record $54.6 million, driven by electronic media revenue from the syndication of Mad Men and the distribution of Debmar-Mercury's Hell's Kitchen.
Revenue from Lionsgate's digital business jumped 123 percent to a record $65 million.
Lionsgate will hold an analyst call to discuss its Q2 results on Thursday morning.