Lionsgate profit, sales fall in fiscal fourth quarter

Lionsgate profit, sales fall in fiscal fourth quarter
Theo James, Miles Teller and Shailene Woodley in the Lionsgate young-adult sequel "Insurgent." Santa Monica-based Lionsgate reported its fiscal fourth-quarter and full-year results Thursday. (Andrew Cooper / Lionsgate)

Lionsgate's profit and sales fell during its fiscal fourth quarter, due to relatively light sales generated from its films at the box office and on home video.

The studio behind the "Hunger Games" and "Divergent" series reported net income of $19.6 million, or 14 cents a share, for the quarter that ended March 31. That was down nearly 60% from the same time a year ago. Revenue for the three-month period fell 10% to $646 million, the company reported Thursday.

The Santa Monica studio also reported full-year earnings for its fiscal 2015.

Annual net income hit $182 million, up about 20% from a year ago. That was despite a 9% decrease in sales attributed to a smaller slate of major films.

Lionsgate reported its results after markets closed. Its shares were little changed in after-hours trading after closing Thursday at $31.98 a share.

The company attributed the yearly profit growth to its expanding television business, which includes productions such as "Anger Management," "Orange Is the New Black" and "Mad Men."

Lionsgate Chief Executive Jon Feltheimer pointed to recent investments in digital entertainment and video games, as well as deals with companies in China, as sources of future growth.

"We're very well positioned to capitalize on opportunities throughout our global environment," Feltheimer said in a statement.

For the year, motion picture revenue declined 17% to $1.82 billion, with a slate that included 10 wide releases, compared with 13 in fiscal 2014. Hits included "The Hunger Games: Mockingjay — Part 1," "Insurgent" and "John Wick," while "The Expendables 3" and "Mordecai" were misses.

Theatrical revenue for the movie unit was $354 million compared with $524.7 million in the prior year.

However, television production sales rose 30% to $579.5 million in fiscal 2015.

"While the results of theatrical releases will ebb and flow every quarter, the improving visibility and margin profile of the TV production segment remains underappreciated," said Eric Wold, an analyst for B. Riley, in a research note published ahead of the earnings report.

The company has been busy making deals in China to tap into the most populous nation's growing film business.

In March, Lionsgate struck a major pact with China's Hunan TV & Broadcast Intermediary Co., which will provide $375 million to the studio for film financing. That agreement does not cover the blockbuster "Hunger Games," "Divergent" and "Twilight" franchises.

Lionsgate previously made an agreement with another Chinese company, Alibaba Group, for a streaming service in the country.

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