Lionsgate is reporting higher revenues after its first full quarter of owning Starz.
The Media Networks group reported revenues of $370.8 million, up from $365.6 million one year ago, on a combined pro forma basis. Segment profits jumped 10.7% to $124.8 million thanks to G&A expense controls and the licensing of “Black Sails.”
Viewership rose only slightly though, as the Starz flagship network ended the quarter with 24.2 million subscribers, up from 24 million in the year-ago quarter. Though subscribers fell from the previous quarter, Jefferies analyst John Janedis predicted the numbers would rise along with new programming releases.
“Starz subs declined 100K sequentially to 24.2M in the March qtr, but should pick up in June with the timing of new programming (“American Gods,” with more to follow in the summer). OTT subs continue to grow reaching ‘well over 1M’ by qtr end - also creating a positive revenue mix shift,” wrote Janedis in a research note. “While the impact from ATT U-Verse is having a negative impact, underlying sub growth is strong at +5%. LGF believes they can continue to increase subs modestly over the long term. The Sprint deal appears to offer upside.”
The Television Production revenues for the quarter were $242.6 million on a combined pro forma basis, but segment profit fell to $13 million after a record $42.1 million last year.
In all, Lionsgate reported revenue of $1.26 billion, net income attributable to Lionsgate shareholders of $62 million, operating income of $71 million and adjusted OIBDA of $163 million.
"We're pleased to report our first full quarter of financial results since we brought Starz into the Lionsgate family, and the numbers reflect a great finish to a strong year," said Lionsgate CEO Jon Feltheimer in a statement. "Our film slate ended fiscal 2017 with an impressive box office run, our Television Group turned in another standout performance and Starz had a great year. We couldn't be more pleased with how successfully we're integrating them into our operations and, working together, unlocking fresh opportunities."
Lionsgate did have to factor in $89 million in restructuring and other costs primarily with the acquisition and integration of Starz.