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Lions Gate (LGF) Stock Rallies on Q4 Earnings, Revenue Beat
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Shares of Lions Gate Entertainment Corp. surged 13.9% during after-market trading hours on May 25, following the company’s announcement of impressive fourth-quarter fiscal 2016 results. Both the top line and bottom line of the company easily surpassed the Zacks Consensus Estimate.
Lions Gate’s quarterly earnings (including stock-based compensation expenses) came in at 13 cents. The Zacks Consensus Estimate was of a loss of 2 cents. However, the company’s earnings plunged 48% year over year.
On a reported basis, including one-items, earnings came in at 26 cents per share as against 39 cents in the year-ago quarter.
On the revenue front, Lions Gate witnessed a 22.5% year-over-year increase to $791.2 million, mainly due to a surge in television revenues and also due to five box office releases in the quarter. The company had only three releases in the prior-year quarter. The figure also surpassed the Zacks Consensus Estimate of $741 million.
The company’s adjusted EBITDA came in at $45.8 million, considerably below the prior-year figure of $90.4 million.
The company’s filmed entertainment backlog was $1.5 billion at the end of the fiscal fourth quarter.
The company believes that the robust television revenues, which drove the company’s top line higher in the reported quarter, will maintain its growth momentum this year.
Fiscal 2016 Performance
Lions Gate recorded adjusted earnings of 49 cents per share for the fiscal year as against $1.39 a year ago. On a reported basis, including one-items, earnings came in at 82 cents per share, down 52.6% from the year-ago quarter figure.
Total revenue inched up 2.2% year over year to $2,347.4 million. The year-over-year improvement in adjusted revenues was backed by sturdy television production revenues.
Lions Gate released 14 theatrical films in fiscal 2016 as against 10 releases in the prior year.
Segmental Performance
During fiscal 2016, Motion Pictures’ revenues of $1,677.5 million fell 7.8% year over year. The downside was attributable to an 11.3% decline in Theatrical revenues to $314.1 million, a 12.5% decrease in Home Entertainment revenues to $579.8 million and a 24.1% plunge in Television revenues to $205.1 million. Nonetheless, the deterioration was partly limited by a rise of 10.7% in International revenues to $548.2 million. Other revenues at the segment plummeted 20.7% year over year to $30.3 million. The decline in Theatrical revenues primarily stemmed from lower revenues from the company’s feature films and also due to lower box office revenues from The Hunger Games: Mockingjay - Part 2 and The Divergent Series: Allegian.
The decline in Home Entertainment revenues is attributable to lower revenues from the company’s Feature Film title. Likewise, International Motion Pictures’ revenues increased on account of a rise in revenues from theatrical slates.
Television Production revenues jumped 15.6% to $669.9 million, largely on the strength of international revenues that soared 69.2% to $190.2 million, the home entertainment category that increased 34.6% to $60.3 million, and domestic television that inched up 0.1% to $415.5 million.
During fiscal 2016, 156 episodes and 121.5 hours of domestic television series were aired that comprised episodes of Casual - Season 1, Manhattan - Season 2, Monica the Medium, Nashville, Manhattan, Greenleaf, Orange Is The New Black and The Royals.
Financial Details
Lions Gate ended fiscal 2016 with cash and cash equivalents of $57.7 million, film obligations and production loans of $715.4 million, and shareholders’ equity of $850.3 million. The company generated free cash flow of $70.4 million in fiscal 2016, down from $261.6 million in fiscal 2016.
Lions Gate, which shares space with major studios like Twenty-First Century Fox, Inc. (FOXA - Free Report) , is a film studio engaged in the production and distribution of motion pictures for theater and straight-to-video release as well as television programming for cable and broadcast networks.
Zacks Rank
Lions Gate currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in this sector include MSG Networks Inc. and World Wrestling Entertainment Inc. . Both these stocks hold a Zacks Rank #2 (Buy).
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Lions Gate (LGF) Stock Rallies on Q4 Earnings, Revenue Beat
Shares of Lions Gate Entertainment Corp. surged 13.9% during after-market trading hours on May 25, following the company’s announcement of impressive fourth-quarter fiscal 2016 results. Both the top line and bottom line of the company easily surpassed the Zacks Consensus Estimate.
Lions Gate’s quarterly earnings (including stock-based compensation expenses) came in at 13 cents. The Zacks Consensus Estimate was of a loss of 2 cents. However, the company’s earnings plunged 48% year over year.
On a reported basis, including one-items, earnings came in at 26 cents per share as against 39 cents in the year-ago quarter.
On the revenue front, Lions Gate witnessed a 22.5% year-over-year increase to $791.2 million, mainly due to a surge in television revenues and also due to five box office releases in the quarter. The company had only three releases in the prior-year quarter. The figure also surpassed the Zacks Consensus Estimate of $741 million.
The company’s adjusted EBITDA came in at $45.8 million, considerably below the prior-year figure of $90.4 million.
The company’s filmed entertainment backlog was $1.5 billion at the end of the fiscal fourth quarter.
The company believes that the robust television revenues, which drove the company’s top line higher in the reported quarter, will maintain its growth momentum this year.
Fiscal 2016 Performance
Lions Gate recorded adjusted earnings of 49 cents per share for the fiscal year as against $1.39 a year ago. On a reported basis, including one-items, earnings came in at 82 cents per share, down 52.6% from the year-ago quarter figure.
Total revenue inched up 2.2% year over year to $2,347.4 million. The year-over-year improvement in adjusted revenues was backed by sturdy television production revenues.
Lions Gate released 14 theatrical films in fiscal 2016 as against 10 releases in the prior year.
Segmental Performance
During fiscal 2016, Motion Pictures’ revenues of $1,677.5 million fell 7.8% year over year. The downside was attributable to an 11.3% decline in Theatrical revenues to $314.1 million, a 12.5% decrease in Home Entertainment revenues to $579.8 million and a 24.1% plunge in Television revenues to $205.1 million. Nonetheless, the deterioration was partly limited by a rise of 10.7% in International revenues to $548.2 million. Other revenues at the segment plummeted 20.7% year over year to $30.3 million.
The decline in Theatrical revenues primarily stemmed from lower revenues from the company’s feature films and also due to lower box office revenues from The Hunger Games: Mockingjay - Part 2 and The Divergent Series: Allegian.
The decline in Home Entertainment revenues is attributable to lower revenues from the company’s Feature Film title. Likewise, International Motion Pictures’ revenues increased on account of a rise in revenues from theatrical slates.
Television Production revenues jumped 15.6% to $669.9 million, largely on the strength of international revenues that soared 69.2% to $190.2 million, the home entertainment category that increased 34.6% to $60.3 million, and domestic television that inched up 0.1% to $415.5 million.
During fiscal 2016, 156 episodes and 121.5 hours of domestic television series were aired that comprised episodes of Casual - Season 1, Manhattan - Season 2, Monica the Medium, Nashville, Manhattan, Greenleaf, Orange Is The New Black and The Royals.
Financial Details
Lions Gate ended fiscal 2016 with cash and cash equivalents of $57.7 million, film obligations and production loans of $715.4 million, and shareholders’ equity of $850.3 million. The company generated free cash flow of $70.4 million in fiscal 2016, down from $261.6 million in fiscal 2016.
Lions Gate, which shares space with major studios like Twenty-First Century Fox, Inc. (FOXA - Free Report) , is a film studio engaged in the production and distribution of motion pictures for theater and straight-to-video release as well as television programming for cable and broadcast networks.
Zacks Rank
Lions Gate currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in this sector include MSG Networks Inc. and World Wrestling Entertainment Inc. . Both these stocks hold a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>