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Lionsgate (LGF.A) Q1 Earnings Lag Estimates, Revenues Fall Y/Y

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Lionsgate (LGF.A - Free Report) reported an adjusted loss of 23 cents per share for the first quarter of fiscal 2023 that lagged the Zacks Consensus Estimate by 8.33%. The company had reported earnings of 18 cents in the year-ago quarter.

Revenues decreased 0.8% year over year to $893.8 million and lagged the consensus mark by 2.29%.

Segment Details

Motion Picture (31.2% of revenues) revenues decreased 4.3% year over year to $278.8 million. The segment generated a profit of $73.1 million, up 6.4% year over year.

Television Production (48.4% of revenues) revenues increased 11.9% year over year to $432.2 million. Segmental profit was $30.7 million, which increased 136.2% year over year.

The Media Networks segment (42.6% of revenues) reported revenues of $381.2 million, down 0.3% year over year. Segmental profit decreased 23.3% to $33 million.

Starz Networks’ revenues decreased 2.4% year over year to $349.6 million.

STARZPLAY International revenues in the quarter rose 31.1% year over year to $31.6 million.

Total Media Networks global subscribers increased to 37.3 million, including STARZPLAY Arabia, a non-consolidated equity method investee, driven by robust international and domestic streaming subscriber growth.

Global streaming subscribers increased 57% year over year to 26.3 million. STARZPLAY International subscribers grew 100% year over year to 14.0 million.

Operating Details

Lionsgate’s adjusted OIBDA decreased 95.8% year over year to $5 million in the reported quarter.

Direct operating expenses, as a percentage of revenues, expanded to 66.7% from 54% in the year-ago quarter.

Distribution and marketing expenses, as a percentage of revenues, contracted 50 bps (basis points) on a year-over-year basis to 23.7%.

Moreover, general & administrative expenses, as a percentage of revenues, decreased 290 bps year over year to 11.6%.

The company reported an operating loss of $68.2 million in the reported quarter against an operating profit of $20.3 million in the year-ago quarter.

Balance Sheet & Cash Flow

As of Jun 30, 2022, Lionsgate had cash and cash equivalents of $378.5 million compared with $371.2 million as of Mar 31, 2022.

Net cash outflow from operating activities was $0.2 million at the end of the fiscal first quarter compared with $171.1 million of cash outflow at the end of the previous quarter.

Adjusted free cash outflow was $61.7 million against a free cash inflow of $87.7 million in the previous quarter.

Zacks Rank & Stocks to Consider

Currently, Lionsgate carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company’s shares have declined 41.9% in the year-to-date period compared with the Zacks Consumer Discretionary sector’s decline of 29.6%.

Here are some better-ranked stocks worth considering in the broader sector.

DraftKings (DKNG - Free Report) carries a Zacks Rank #2 (Buy). DKNG’s shares have decreased 41.4% in the year-to-date period compared with the Zacks Gaming industry’s decline of 31.9%. DKNG is scheduled to report second-quarter 2022 results on Aug 5, after market close.

Enthusiast Gaming (EGLX - Free Report) carries a Zacks Rank #2. EGLX’s shares have fallen 35.4% in the year-to-date period. EGLX is scheduled to report second-quarter 2022 results on Aug 15.

Century Casinos (CNTY - Free Report) carries a Zacks Rank #2. CNTY’s shares have slumped 28.2% in the year-to-date period. CNTY is scheduled to report second-quarter 2022 results on Aug 5, after market close.