Lionsgate (LGF.A) Estimates lag third-quarter earnings, year-over-year revenue growth

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Lions Gate (LGF.A) reported adjusted earnings of 2 cents per share for the third quarter of fiscal 2022, trailing Zacks’ consensus estimate by 90.48%. The figure was down 90.5% year-on-year.
Revenue rose 5.9% year-over-year to $885.4 million, but was below the consensus mark of 10.71%.

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Segment details

Movie theater revenue (31.1% of revenue) increased 10% year-over-year to $275.3 million. The sector generated a profit of $67.5 million, up 24.5% year-on-year.

Television production revenues (49.5% of revenue) jumped 92.2% year over year to $438.6 million. Segment profit was $19.3 million, down 34.6% year-on-year.

The Media Networks segment (43.9% of revenue) reported revenue of $388.9 million, down 4.3% year-over-year. Segment profit decreased 65.1% to $28.5 million.
Starz Networks revenue fell 3.4% year over year to $362.5 million.
STARZPLAY International’s revenue in the quarter jumped 49.2% year over year to $26.4 million.
Media Networks global subscribers reached 31.4 million, including STARZPLAY Arabia, a non-consolidated equity method entity, driven by strong domestic and international streaming subscriber growth.
Global streaming subscribers grew 44% year over year to 19.7 million. STARZPLAY International subscribers grew 98% year over year to 8.5 million.

Operation details

Lionsgate’s adjusted OIBDA decreased 31.5% year-over-year to $91.6 million in the quarter under review.
Direct operating expenses, as a percentage of revenue, increased 360 basis points (bps) year over year to 58.5%.
Distribution and marketing expenses, as a percentage of revenue, increased 140 basis points year on year to 22.5%.
Additionally, general and administrative expenses, as a percentage of revenue, decreased 110 basis points year over year to 12.7%.
Operating profit was $9.3 million in the reported quarter, down 74.9% year-over-year.

Balance sheet and cash flow

As of December 31, 2021, Lionsgate had cash and cash equivalents of $314.4 million, compared to $442.6 million as of September 30, 2021.
Net cash used in operating activities was $157.3 million at the end of the third quarter of the fiscal year, compared to $16.1 million of cash inflows at the end of the previous quarter .
Adjusted free cash outflow was $23 million compared to free cash inflow of $195.2 million in the prior quarter.

Zacks Ranking and Stocks to Consider

Currently, Lionsgate carries a Zacks rank of #5 (strong sell).
Shares of Lionsgate have returned 1.5% against Zacks’ consumer discretionary sector’s 19.4% decline over the past year.

rock marks RKY, JAKKS Pacific JAKK and Wolverine around the world WWW are higher ranked stocks within the broader consumer and discretionary sector. Rocky Brands and Jakks Pacific are sporting a Zacks Rank #1 (Strong Buy) while Wolverine World Wide is sporting a Zacks Rank #2 (Buy) at present. You can see the full list of today’s Zacks #1 Rank stocks here.
Shares of Rocky Brands have returned 12.7% against Zacks’ Consumer Discretionary sector decline over the past year.
RCKY is expected to release its fourth quarter 2021 results on February 23, 2022.
Shares of Jakks Pacific have returned 6.4% over the past year.
JAKK is expected to release its fourth quarter 2021 results on February 17, 2022.
Shares of Wolverine World Wide have fallen 18% over the past year.
WWW is expected to report its fourth quarter 2021 results on February 24, 2022.

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