Lionsgate stock soars
Studio reported its second-best quarter ever
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In first-quarter tallies for fiscal 2010, the company saw a profit of $36.3 million for the period ended June 30 vs. $3.5 million a year earlier. Revenues jumped 30% to $387.7 million from a year-earlier $298.5 million.
Lionsgate was the hot stock on Wall Street on Monday. Shares ended the day up 49¢ (8.2%) to $6.46. The stock was up as much as 11% in after-hours trading.
TV production revs soared 112% thanks to cable shows that are continuing ("Weeds," "Tyler Perry's House of Payne") and new ("Nurse Jackie"). Lionsgate TV's Emmy-winning AMC drama "Mad Men" kicks off its third season on Sunday.
Home entertainment revs dipped 6%, a smaller decline than at other studios. And the company's recent acquisitions, Mandate Pictures and TV Guide Network, are starting to pay off asbottom-line contributors.
Lionsgate's homevideo arm should also see a boost in earnings from a new multiyear pact inked with the Jim Henson Co. to distribute such family-friendly fare as "Fraggle Rock," "Emmet Otter" and "The Hoobs" in North America.
The deal includes 350 hours of films, TV shows and specials from the Henson Co. catalog that Lionsgate will release on DVD, video-on-demand and digitally. Lionsgate had already distribbed several of the Henson properties in the past, including select "Fraggle Rock" DVDs.
On the film side, Lionsgate released only one film during that period: "Crank: High Voltage." That meant lower costs for P&A but lower B.O.
The strong earnings report is a needed shot in the arm for Lionsgate as financier Carl Icahn has been aggressively building up his position in the company.
"The real story this quarter was the continued strong growth of our diversified asset base," said Lionsgate co-chair/CEO Jon Feltheimer.
"Now, investors really get to see the power of a film library and the power of the TV business, coupled with the fact that P&A costs were pretty minimal," said media analyst David Miller of Caris & Co.
TV production revenues at the studio soared to $41.1 million as licensing orders for Lionsgate Television and Debmar-Mercury shows were picked up. That included orders for Showtime's "Nurse Jackie" and "Weeds" and TBS' "Tyler Perry's House of Payne." Lionsgate also cited its co-venture with ISH Entertainment, producer of MTV's "Paris Hilton's My New BFF."
While box office revenues declined 26%, Lionsgate didn't have to spend as much on prints and advertising. Television revenue from film titles also took a hit, down 29%.
Overall film revs still grew 5.7%, with Mandate's contribution coming in at $53.1 million vs. $8.1 million a year earlier.
TV Guide Network and TV Guide.com brought Lionsgate $27.8 million in new revenues.
In home entertainment, Lionsgate cited strong sales for the season three and four DVD sets of "Weeds" in its earnings release.
The company is scheduled for a conference call with the media today. It seems inevitable that someone will raise the question of Icahn, who this year amassed a 17.7% stake amid rumors that he plans to launch a proxy fight at the company's annual meeting Sept. 15.
That means he could propose himself and/or his deputies for election as alternative candidates for the board of directors.
(Jill Goldsmith and Marc Graser contributed to this report.)
