John Wick continues to be the straw that stirs the drink at Lionsgate.
The home entertainment debut of the fourth film of the hit man series and the premiere of its streaming spin-off The Continental lifted revenues at Lionsgate to just over $1 billion, beating Wall Streets estimates. That was up from $875.2 million in the prior-year quarter. However, the company also reported a net loss to Lionsgate shareholders of $886.2 million, which it attributed to restructuring costs and a writedown related to its decision to have its Starz business exit Latin America and the United Kingdom.The company didnt spill as much red ink as it did in the prior-year quarter when it reported a loss of $1.181 billion. Adjusted net income was $48.6 million and there was an adjusted loss per share of $3.79.
The earnings report comes as Lionsgate is exploring selling or spinning off Starz, its cable and streaming business, and as it prepares to finalize its $500 million purchase of Entertainment Ones (eOne) TV and film operations fromHasbro. EOne is the producer of Yellowjackets and Naked and Afraid and the deal also includes rights for Hasbro-based shows like Play-Doh Squished.
The earnings were also unveiled as Hollywood is celebrating the end of the actors strike, which will allow it to go back into production on movies and shows. In a call with analysts and investors, Lionsgate CEO Jon Feltheimer estimated that the actors strike and the writers strike that concluded last month cost the company approximately $30 million, which he said was a little less than we originally forecast.
During the quarter, Lionsgates motion picture segment revenue increased 77% to $395.9 million, with profits jumping 22% to $63.2 million. That was largely due to the success of John Wick: Chapter Four on home entertainment as well as the theatrical release of the tenth Saw film.
Lionsgates television unit saw revenues fall 9% to $393.9 million while profits jumped from $13.6 million to $63.2 million. The revenue declines were linked to the impact of the strikes, which prevented Lionsgate from delivering as many episodes.
Lionsgates media networkssegment, which includes Starz, saw revenue rise 5% to$416.5 million thanks to growth in its domestic streaming business. Segment profit grew to $66.6 million compared to $21 million in the prior-year period. Starzadded 480,000 subscribers during the quarter. The service now has an audience of 26.8 million users.
Despite the turmoil in the entertainment industry and the uncertainty surrounding Lionsgates plans for Starz, Feltheimer sounded an optimistic note to analysts.
Were operating in a difficult environment but the quarter speaks to who we are, staying resilient and using every one of the tools at our disposal to keep our pipelines full, maximizing our assets, concentrating our resources in places where we know we can win, and positioning the company for future growth, he said.