Lionsgate Shares Plummet Following Disappointing Earnings
Lionsgate shares have been hammered in the wake of disappointing earnings and the company’s decision not to make projections about its future performance for Wall Street.
Shares slid by 33%, falling $8.39 to $17.05 in mid-session trading on the New York Stock Exchange.
The company had cited a soft performance by its movies — mostly notably “The Hunger Games: Mockingjay Part 2” — as the key reason for falling short of Wall Street expectations in its earnings for its third fiscal quarter. The fourth and final “Hunger Games” movie grossed $650 million worldwide, the lowest of the four titles in the hit Jennifer Lawrence franchise.
Lionsgate CEO Jon Feltheimer provided specifics of the impact during an earnings call Friday with analysts. “‘Mockingjay 2’ is underperforming our ultimate profit margins by over $100 million, much of which hit in our guidance period,” he explained.
Feltheimer also said the studio is tracking below its previous forecast for $1.1 billion to $1.2 billion in adjusted EBIDTA (earnings before interest, taxes, depreciation and amortization) in fiscal 2016, ending March 31. He added that Lionsgate would not offer more financial guidance until May, when it will have the results of “Gods of Egypt,” which opens Feb. 26, and “Allegiant” — the third movie in the “Divergent” franchise — which debuts in March.
Lionsgate has usually updated its guidance on EBIDTA on its conference calls.
Lionsgate disclosed in a regulatory filing on Thursday that it plans to restart talks to acquire Starz a year after making an investment in the premium cable network. Lionsgate execs offered little guidance on that front during the conference call and would not indicate whether any talks have commenced.
Shares of Starz dropped 16% to $26.05 in mid-session trading.
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