Liam Hemsworth as Gale Hawthorne in The Hunger Games: Mockingjay -- Part 1. Credit: Lionsgate via Facebook.
Shares of Lions Gate Entertainment (LGF +0.00%) stock is down 3% after hours after reporting lower-than-expected revenue and profit in its fiscal third quarter. Here's a closer look at the final totals versus Wall Street's projections:
| Lions Gate | Revenue | YOY Growth | EPS | YOY Growth |
|---|---|---|---|---|
| Consensus estimate | $778.71 million | (7.3%) | $0.69 | 9.5% |
| Fiscal Q3 actuals | $751.29 million | (10.6%) | $0.68 | 7.9% |
| DIFFERENCE | ($27.42 million) | (3.3%) | ($0.01) | (1.6) |
Sources: S&P Capital IQ and Lions Gate press release.
In a press release, CEO John Feltheimer said:
Our television division had another stellar quarter as it continues to emerge as a leading supplier of premium scripted content, and our film business achieved strong profitability with a diverse portfolio of films. We're also pleased to see our digital initiatives beginning to deliver incremental revenue and profits, and we expect their contributions to continue to grow.
What went right: TV production was every bit the success Feltheimer claims. Revenue from that group nearly doubled, to $161.2 million, thanks to record output. Cable and broadcast programmers took delivery of 74 episodes and 58.5 hours of domestic television programming in the quarter. Internationally, Lions Gate licensed episodes of Anger Management, Orange is the New Black, Nashville, and Mad Men.
What went wrong: Overall revenue in the Motion Picture segment fell 22%, to $590.1 million. Lions Gate had just two wide-release films screened during fiscal Q3 versus four in the prior-year quarter. A drop in revenue from The Hunger Games franchise also appears to be partly to blame. This year's Mockingjay -- Part 1 has earned $714.3 million worldwide, 17.4% less than last year's Catching Fire.
What's next: Lions Gate didn't include guidance in its press release. What do analysts say? According to S&P Capital IQ, the company is on track to earn $734.28 million in fiscal fourth-quarter revenue, and $0.45 in adjusted profit. Both figures would make for a significant improvement over the same period last year ($721.86 million in revenue and a $0.42 per share of profit, respectively).
Longer term, analysts have Lions Gate generating 18.45% average annual earnings growth during the next three-to-five years.
