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Lionsgate (LGF.A) Q3 Earnings Beat Estimates, Revenues Down Y/Y

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Lionsgate (LGF.A - Free Report) reported third-quarter fiscal 2021 adjusted earnings of 21 cents per share that beat the Zacks Consensus Estimate by 23.5% and surged 50% year over year.

However, revenues decreased 16.2% year over year to $836.4 million but beat the consensus mark by 7.9%.

Segment Details

Motion Picture (29.9% of revenues) revenues decreased 47.2% year over year to $250.3 million, primarily attributed to theatre closings related to the coronavirus pandemic.

Markedly, film and television library revenues, on a trailing 12-month basis, grew to $765 million in the reported quarter.

Moreover, the Motion Picture segment generated a profit of $50 million, up 2% year over year.
 

Lions Gate Entertainment Corp. Price, Consensus and EPS Surprise

 

Lions Gate Entertainment Corp. Price, Consensus and EPS Surprise

Lions Gate Entertainment Corp. price-consensus-eps-surprise-chart | Lions Gate Entertainment Corp. Quote

 

Television Production (27.3% of revenues) revenues increased 20.5% year over year to $228.2 million. Segment profit was $29.5 million against loss of $5.7 million reported in the year-ago quarter.

The Media Networks segment (48.6% of revenues), formed after the acquisition of Starz, reported revenues of $406.2 million, up 6.2% year over year, driven by increased revenues from STARZPLAY International. Segment profit declined 20% to $81.7 million.

Starz Networks revenues increased 2.1% year over year to $375.3 million. STARZPLAY International revenues in the quarter surged to $17.7 million, up 190.2% year over year. Streaming services revenues soared 51.7% year over year to $13.2 million in the reported quarter.

Media Networks global subscribers, including STARZPLAY Arabia, a non-consolidated equity method investee, increased to 28 million, with global OTT subscribers increasing 900K to 14.6 million, 52% of the total.

STARZPLAY International OTT subscribers grew 26% in the quarter and domestic OTT subscribers posted solid gains of 300K.

Operating Details

Lionsgate’s adjusted OIBDA grew 7.9% year over year to $133.8 million in the reported quarter.

Direct operating expenses, as a percentage of revenues, declined 460 basis points (bps) on a year-over-year basis to 54.9%.

Moreover, distribution and marketing expenses, as a percentage of revenues, fell 690 bps on a year-over-year basis to 21.1%.

However, general & administrative expenses, as a percentage of revenues, increased 290 bps year over year to 13.8%.

Operating income was $37.1 million in the reported quarter against loss of $39.5 million in the year-ago quarter.

Balance Sheet & Cash Flow

As of Dec 31, 2020, Lionsgate had cash and cash equivalents of $551.5 million compared with $463.7million as of Sep 30, 2020.

Moreover, as of Dec 31, 2020, total film obligations and production loans amounted to $524 million compared with $405.2 million as of Sep 30, 2020.

Net cash outflow from operating activities was $44.2 million at the end of fiscal third quarter compared with $122 million at the end of the previous quarter and $215.9 million in the year-ago quarter.

Adjusted free cash flow was $110.7 million compared with free cash flow of $113 million in the previous quarter and $88.4 million in the year-ago quarter.

Zacks Rank & Stocks to Consider

Currently, Lionsgate carries a Zacks Rank #2 (Buy).

TEGNA (TGNA - Free Report) , Take Two Interactive (TTWO - Free Report) and Fox Corporation (FOXA - Free Report) are some of the top-ranked stocks in the broader Consumer & Discretionary sector. While TEGNA sports a Zacks Rank #1 (Strong Buy), both Take Two and Fox carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Take Two and Fox are set to report their quarterly results on Feb 8 and 9, respectively. TEGNA is scheduled to report the same on Mar 1.

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