Lionsgate Entertainment surpassed Wall Street analysts’ expectations for the company’s 2019 fiscal first quarter financial results on Thursday, pointing to the success of Starz’s TV and streaming service platforms as a major reason.
The studio reported adjusted earnings of 18 cents per share, which was much better than analysts’ expectations for a loss of 7 cents per share, according to estimates gathered by Yahoo Finance. The company’s earnings were an improvement compared with the 8 cents per share earnings Lionsgate reported during the same quarter a year ago.
Lionsgate’s revenue for the quarter was $932.7 million, above the $885.1 million Wall Street analysts were anticipating. The company’s first-quarter revenue suffered a slight decline compared with the $1.01 billion reported last year.
Lionsgate shares were up nearly 2.5 percent in after-hours trading following the company’s earnings report.
“We’re pleased to report a strong quarter with continued robust free cash flow and solid contributions from all of our businesses,” Lionsgate CEO Jon Feltheimer said in a statement. “Our global content machine is operating at full throttle, and we continue to invest in a programming and international rollout strategy at Starz that is working. Our initiatives in the quarter continued to strengthen Lionsgate’s stature as a unique and essential part of the media ecosystem.”
Lionsgate said revenue at its media networks increased 3 percent to $354.9 million, thanks mainly to the growth in streaming revenue. The company said Starz saw an increase of 300,000 domestic subscribers across its TV and OTT platforms during the quarter.
Revenue for the film division dropped 23 percent in the quarter to $365.3 million. Lionsgate said there tough comparisons to the success of last year’s home entertainment release of “John Wick: Chapter 2” and the international revenue from “La La Land.” Profits for the film studio declined 41 percent to, due to higher theatrical marketing expenses.
The TV production studio saw revenue grow 7 percent to $279.4 million in the quarter as gains in domestic license fees and international revenue offset the tough comparison to a prior year quarter that included a digital media licensing agreement for the Starz original series “Power.”