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Lionsgate (LGF.A) Q1 Earnings Top Estimates, Revenues Rise Y/Y

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Lionsgate (LGF.A - Free Report) reported adjusted earnings of 18 cents per share for the first quarter of fiscal 2022 which beat the Zacks Consensus Estimate by 100%. However, the figure declined 53.8% from the year-ago period.

Revenues increased 10.8% year over year to $901.2 million and beat the consensus mark by 1.7%.

Segment Details

Motion Picture (32.3% of revenues) revenues increased 3.7% year over year to $291.2 million.

Markedly, film and television library revenues, on a trailing 12-month basis, grew to $740 million in the reported quarter.

The Motion Picture segment generated profit of $44.3 million, down 56.2% year over year.

Television Production (42.8% of revenues) revenues surged 97.3% year over year to $386.7 million. Segment profit was $3 million, which declined 91.4% year over year.

Meanwhile, the Media Networks segment (42.4% of revenues), formed after the acquisition of Starz, reported revenues of $382.3 million, up 4.1% year over year, driven by increased revenues from STARZPLAY International. Segment profit increased 22.8% to $88.2 million.

Starz Networks revenues increased 3.6% year over year to $358.2 million. STARZPLAY International revenues in the quarter surged 141% year over year to $24.1 million.

Media Networks global subscribers increased year over year to 28.9 million, including STARZPLAY Arabia, a non-consolidated equity method investee, driven by robust domestic and international streaming subscriber growth. Global OTT streaming subscribers increased 58% year over year to 16.7 million. STARZPLAY International subscribers grew 106% year over year to 7.0 million.

Operating Details

Lionsgate’s adjusted OIBDA declined 31% year over year to $119.8 million in the reported quarter.

Direct operating expenses, as a percentage of revenues, expanded 200 basis points (bps) on a year-over-year basis to 54%.

Meanwhile, distribution and marketing expenses, as a percentage of revenues, expanded 670 bps on a year-over-year basis to 24.1%.

Moreover, general & administrative expenses, as a percentage of revenues, increased 110 bps year over year to 14.5%.

Operating income was $20.3 million in the reported quarter, down 77.3% year over year.

Balance Sheet & Cash Flow

As of Jun 30, 2021, Lionsgate had cash and cash equivalents of $261.6 million compared with $528.7 million as of Mar 31, 2021.

Net cash outflow from operating activities was $348.7 million at the end of the fiscal first quarter compared with $159.8 million at the end of the previous quarter and positive net cash flow of $81.4 million in the year-ago quarter.

Adjusted negative free cash flow was $191.9 million against free cash flow of $3.1 million in the previous quarter and $77 million in the year-ago quarter.

Zacks Rank & Stocks to Consider

Currently, Lionsgate carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader consumer discretionary sector are WW International, Inc. (WW - Free Report) , CuriosityStream Inc. (CURI - Free Report) and NeoGames S.A. (NGMS - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CuriosityStream and WW International are slated to report quarterly earnings on Aug 10, while NeoGames S.A. is scheduled to report on Aug 11.