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Lionsgate (LGF.A) Q4 Earnings Lag Estimates, Revenues Rise Y/Y

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Lionsgate (LGF.A - Free Report) reported adjusted earnings of 6 cents per share for the fourth quarter of fiscal 2022 that lagged the Zacks Consensus Estimate by 33.33%. The company had reported break-even earnings in the year-ago quarter.

Revenues increased 6.1% year over year to $929.9 million but lagged the consensus mark by 2.77%.

Segment Details

Motion Picture (31% of revenues) revenues decreased 1.5% year over year to $288.1 million. The segment generated a profit of $49.5 million, down 19.6% year over year.

Television Production (39.8% of revenues) revenues surged 75.7% year over year to $370.2 million. Segmental profit was $33.1 million, which increased 263.7% year over year.

Media Networks’ segment (40.9% of revenues) reported revenues of $380.2 million, down 5.2% year over year. Segmental profit decreased 23.3% to $33 million.

Starz Networks’ revenues decreased 4.2% year over year to $349.7 million.

STARZPLAY International revenues in the quarter rose 29.2% year over year to $30.5 million.

Total Media Networks global subscribers increased to 35.8 million, including STARZPLAY Arabia, a nonconsolidated equity method investee, driven by robust international and domestic streaming subscriber growth.

Global streaming subscribers increased 47% year over year to 24.5 million. STARZPLAY International subscribers grew 88% year over year to 12.8 million.

Operating Details

Lionsgate’s adjusted OIBDA increased 6.7% year over year to $82.6 million in the reported quarter.

Direct operating expenses, as a percentage of revenues, expanded 760 basis points (bps) on a year-over-year basis to 62%.

Distribution and marketing expenses, as a percentage of revenues, contracted 230 bps on a year-over-year basis to 24.5%.

Moreover, general & administrative expenses, as a percentage of revenues, decreased 320 bps year over year to 13.2%.

The company reported an operating loss of $50.4 million in the reported quarter against an operating profit of $14.3 million in the year-ago quarter.

Balance Sheet & Cash Flow

As of Mar 31, 2022, Lionsgate had cash and cash equivalents of $371.2 million compared with $314.4 million as of Dec 31, 2021.

Net cash outflow from operating activities was $171.1 million at the end of the fiscal fourth quarter compared with $159.8 million of cash inflow at the end of the previous quarter.

Adjusted free cash flow was $87.7 million compared with a free cash inflow of $3.1 million in the previous quarter.

Zacks Rank & Stocks to Consider

Currently, Lionsgate carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Zacks Consumer Discretionary sector are lululemon athletica (LULU - Free Report) , Oxford Industries (OXM - Free Report) and Academy Sports and Outdoors (ASO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

lululemon athletica is scheduled to announce first-quarter 2022 results on Jun 2. The company is down 26.6% in the year-to-date period compared with the Zacks Textile - Apparel industry’s decline of 36.1%.

Oxford Industries is scheduled to announce first-quarter 2022 results on Jun 8. Oxford Industries is down 16.3% in the year-to-date period compared with the Zacks Textile - Apparel industry’s decline of 29.1%.

Academy Sports and Outdoors is scheduled to announce first-quarter 2022 results on Jun 14. Academy Sports and Outdoors is down 17.8% in the year-to-date period against the Zacks Leisure and Recreation Services industry’s decline of 33.8%.

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