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Why Is Lions Gate (LGF.A) Up 11.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for Lions Gate Entertainment (LGF.A - Free Report) . Shares have added about 11.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Lions Gate due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Lionsgate reported adjusted loss of 4 cents per share for the first quarter of fiscal 2024, narrower than the Zacks Consensus Estimate of a loss of 24 cents. The company had incurred a loss of 23 cents per share in the year-ago quarter.
Revenues increased 1.6% year over year to $908.6 million and beat the consensus mark by 1.75%.
Segment Details
Motion Picture (44.7% of revenues) revenues increased 45.8% year over year to $406.5 million. The segment generated a profit of $69.2 million, up 37% year over year. The figure beat the Zacks Consensus Estimate by 18.31%.
Television Production (24% of revenues) revenues decreased 49.5% year over year to $218.5 million. Segmental profit was $22.9 million, up 16.8% year over year. The figure missed the Zacks Consensus Estimate by 21.79%.
The Media Networks segment (41.9% of revenues) reported revenues of $381.1 million, which remained steady year over year. Segmental profit increased 186.2% to $31.9 million. The figure beat the Zacks Consensus Estimate by 0.9%.
Starz Networks’ revenues decreased 3.5% year over year to $337.4 million. The figure missed the Zacks Consensus Estimate by 3.41%.
LIONSGATE+ revenues in the quarter rose 38.3% year over year to $43.7 million. The figure beat the Zacks Consensus Estimate by 53.64%.
Total global subscribers, including STARZPLAY Arabia (a non-consolidated equity method investee), decreased sequentially to 29.4 million, primarily due to linear and over-the-top (OTT) pressures domestically. The figure missed the Zacks Consensus Estimate by 3.39%.
Total OTT subscribers increased 9% year over year to 19.9 million.
Operating Details
Lionsgate’s adjusted OIBDA increased 1,614% year over year to $85.7 million in the reported quarter.
Direct operating expenses, as a percentage of revenues, contracted 1,380 basis points (bps) to 53%.
Distribution and marketing expenses, as a percentage of revenues, expanded 320 bps to 26.9%.
Moreover, general & administrative expenses, as a percentage of revenues, expanded 200 bps year over year to 13.6%.
The company reported an operating loss of $16.8 million in the reported quarter, up 75.4% from the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2023, Lionsgate had cash and cash equivalents of $272.1 million compared with $272.1 million as of Mar 31, 2023.
Net cash flow provided by operating activities was $29.2 million at the end of the fiscal first quarter compared with $13.6 million of cash flow used at the end of the previous quarter.
Adjusted free cash flow was $34.8 million against a free cash flow of negative $36.7 million in the previous quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -14.91% due to these changes.
VGM Scores
At this time, Lions Gate has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Lions Gate has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Lions Gate (LGF.A) Up 11.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Lions Gate Entertainment (LGF.A - Free Report) . Shares have added about 11.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Lions Gate due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Lionsgate Q1 Earnings Beat Estimates, Revenues Rise
Lionsgate reported adjusted loss of 4 cents per share for the first quarter of fiscal 2024, narrower than the Zacks Consensus Estimate of a loss of 24 cents. The company had incurred a loss of 23 cents per share in the year-ago quarter.
Revenues increased 1.6% year over year to $908.6 million and beat the consensus mark by 1.75%.
Segment Details
Motion Picture (44.7% of revenues) revenues increased 45.8% year over year to $406.5 million. The segment generated a profit of $69.2 million, up 37% year over year. The figure beat the Zacks Consensus Estimate by 18.31%.
Television Production (24% of revenues) revenues decreased 49.5% year over year to $218.5 million. Segmental profit was $22.9 million, up 16.8% year over year. The figure missed the Zacks Consensus Estimate by 21.79%.
The Media Networks segment (41.9% of revenues) reported revenues of $381.1 million, which remained steady year over year. Segmental profit increased 186.2% to $31.9 million. The figure beat the Zacks Consensus Estimate by 0.9%.
Starz Networks’ revenues decreased 3.5% year over year to $337.4 million. The figure missed the Zacks Consensus Estimate by 3.41%.
LIONSGATE+ revenues in the quarter rose 38.3% year over year to $43.7 million. The figure beat the Zacks Consensus Estimate by 53.64%.
Total global subscribers, including STARZPLAY Arabia (a non-consolidated equity method investee), decreased sequentially to 29.4 million, primarily due to linear and over-the-top (OTT) pressures domestically. The figure missed the Zacks Consensus Estimate by 3.39%.
Total OTT subscribers increased 9% year over year to 19.9 million.
Operating Details
Lionsgate’s adjusted OIBDA increased 1,614% year over year to $85.7 million in the reported quarter.
Direct operating expenses, as a percentage of revenues, contracted 1,380 basis points (bps) to 53%.
Distribution and marketing expenses, as a percentage of revenues, expanded 320 bps to 26.9%.
Moreover, general & administrative expenses, as a percentage of revenues, expanded 200 bps year over year to 13.6%.
The company reported an operating loss of $16.8 million in the reported quarter, up 75.4% from the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2023, Lionsgate had cash and cash equivalents of $272.1 million compared with $272.1 million as of Mar 31, 2023.
Net cash flow provided by operating activities was $29.2 million at the end of the fiscal first quarter compared with $13.6 million of cash flow used at the end of the previous quarter.
Adjusted free cash flow was $34.8 million against a free cash flow of negative $36.7 million in the previous quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -14.91% due to these changes.
VGM Scores
At this time, Lions Gate has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Lions Gate has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.