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Lionsgate (LGF.A) Q4 Earnings Top Estimates, Revenues Fall Y/Y

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Lionsgate (LGF.A - Free Report) reported breakeven earnings for the fourth quarter of fiscal 2021 in contrast to the Zacks Consensus Estimate of a loss of 5 cents per share. However, the figure declined from 25 cents per share reported in the year-ago period.

Moreover, revenues decreased 7.2% year over year to $876.4 million and beat the consensus mark by 10.6%.

Segment Details

Motion Picture (33.4% of revenues) revenues decreased 25.7% year over year to $292.4 million, primarily attributed to theater closings related to the coronavirus pandemic.

Markedly, film and television library revenues, on a trailing 12-month basis, grew to $780 million in the reported quarter.

Moreover, the Motion Picture segment generated a profit of $61.6 million, down 39.1% year over year.

Television Production (24% of revenues) revenues decreased 18.4% year over year to $210.7 million. Segment profit was $9.1 million, which declined 57.7% year over year.

Meanwhile, the Media Networks segment (45.8% of revenues), formed after the acquisition of Starz, reported revenues of $401 million, up 12% year over year, driven by increased revenues from STARZPLAY International. Segment profit increased 68.6% to $43 million.

Starz Networks revenues increased 8.1% year over year to $365 million. STARZPLAY International revenues in the quarter surged 153.8% year over year to $23.6 million. Streaming services revenues increased 12.7% year over year to $12.4 million in the reported quarter.

Media Networks global subscribers, including STARZPLAY Arabia, a non-consolidated equity method investee, increased to 29.5 million. Global streaming subscribers increased 69% year over year to 16.7 million, exceeding the company’s guidance of 13 to 15 million subscribers.

Operating Details

Lionsgate’s adjusted OIBDA declined 38.5% year over year to $77.4 million in the reported quarter.

Direct operating expenses, as a percentage of revenues, declined 530 basis points (bps) on a year-over-year basis to 54.4%.

Meanwhile, distribution and marketing expenses, as a percentage of revenues, expanded 380 bps on a year-over-year basis to 26.8%.

Moreover, general & administrative expenses, as a percentage of revenues, increased 440 bps year over year to 16.4%.

Operating income was $14.3 million in the reported quarter against loss of $12 million in the year-ago quarter.

Balance Sheet & Cash Flow

As of Mar 31, 2021, Lionsgate had cash and cash equivalents of $528.7 million compared with $551.5 million as of Dec 31, 2020.

Net cash outflow from operating activities was $159.8 million at the end of the fiscal fourth quarter compared with $44.2 million at the end of the previous quarter and positive net cash flow of $180.3 million in the year-ago quarter.

Adjusted free cash flow was $3.1 million compared with free cash flow of $110.7 million in the previous quarter and $175.2 million in the year-ago quarter.

Zacks Rank & Stocks to Consider

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

Some other top-ranked stocks in the broader consumer & discretionary sector include Gray Television, Inc. (GTN - Free Report) , WW International, Inc. (WW - Free Report) and YETI Holdings, Inc. (YETI - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Long-term earnings growth rate for Gray Television, WW International and YETI Holdings is currently pegged at 10%, 15% and 16.9%, respectively.

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