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Lions Gate (LGF.A) Reports Q3 Loss, Revenue Increases Y/Y

Lions Gate Entertainment Corp.LGF.A , which has completed the acquisition of Starz, reported third-quarter fiscal 2017 quarterly numbers, wherein the company reported loss per share of 19 cents. In the year-ago quarter, the company had reported earnings per share of 26 cents. Further, the company's adjusted earnings in the reported quarter came in at 20 cents per share.

On the revenue front, Lions Gate witnessed a 12.1% year-over-year increase to $752 million, mainly due to a surge in Television Production and Starz acquisition.

The company's adjusted EBITDA came in at $138 million, in comparison with $54 million reported in the prior-year quarter. The company's filmed entertainment backlog was nearly $1.4 billion at the end of the fiscal third quarter.

Not much movement was witnessed in after-hours trading session yesterday. Moreover, the stock has declined 39.9% in the past three months, underperforming the Zacks categorized Movie/TV Production/Distribution industry which has gained 8.8%.

Segmental Performance

Despite robust box office performances of Boo! A Madea Halloween and Hacksaw Ridge in the reported quarter, Motion Pictures' revenues declined 13% year over year $440 million primarily due to tough year-over-year comparison. In the prior-year quarter, the company released The Hunger Games: Mockingjay Part 2.

Segment profit jumped 55% to $51 million, primarily due to reductions in direct operating expenses as well as distribution and marketing costs. Segment profit margin expanded 510 basis points to 11.6%.

Media Networks segment formed after the acquisition of Starz reported revenue of $85 million. The segment profit came in at $33 million, representing profit margin of 39%.

Television Production revenues surged 39% to $229 million, driven mostly due to rise in television deliveries, which includes episodes of Orange is the New Black, the new series Dear White People and the three-hour musical event Dirty Dancing. Moreover, segment profit soared 117% to $26 million, driven by decrease in distribution and marketing expenses. Segment profit margin expanded 410 basis points to 11.4%.

Financial Details

Lions Gate ended the third quarter with cash and cash equivalents of $595 million, film obligations and production loans of $162 million and shareholders' equity of $2,322 million. The company generated free cash flow of $40 million, in comparison with $62 million in the prior-year quarter.

Lions Gate, which shares space with major studios like Twenty-First Century Fox, Inc. FOXA , is a film studio engaged in the production and distribution of motion pictures for theater and straight-to-video release as well as television programming for cable and broadcast networks.

Zacks Rank & Other Stocks to Consider

Lions Gate currently carries a Zacks Rank #2 (Buy). Some favorably placed stocks worth considering include Gray Television, Inc. GTN and Scripps Networks Interactive, Inc. SNI . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Gray Television shares have increased more than 49% in the past three months.

Scripps Networks Interactive has a long-term earnings growth rate of 10.8% and its shares have increased nearly 15% in the past three months.

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Gray Television, Inc. (GTN): Free Stock Analysis Report

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Twenty-First Century Fox, Inc. (FOXA): Free Stock Analysis Report

Lions Gate Entertainment Corporation (LGF.A): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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