The highly anticipated return to Panem with “The Hunger Games: The Ballad of Songbirds and Snakes” has proven to be a lucrative endeavor for Lionsgate. However, the recent strikes by writers and actors created upheaval within the industry, impacting the company’s ability to produce new television episodes and putting a strain on its third-quarter earnings.
Despite the challenges, Lionsgate reported a net loss of $107.4 million, in contrast to the $15.2 million in profits from the same period in 2022. Although revenue reached $975.1 million, it fell short of the $1 billion reported in the previous year’s quarter. The company’s adjusted earnings per share stood at 27 cents, down from 21 cents per share reported in the same period in 2022.
This mixed report reflects the ongoing financial repercussions of the strikes that brought the entertainment industry to a standstill. However, despite the decline in revenues, Lionsgate’s adjusted earnings surpassed Wall Street’s forecasts.
Lionsgate CEO Jon Feltheimer expressed satisfaction with the company’s performance, stating, “We’re pleased to report another strong financial quarter in which the performance of our diversified businesses gives us confidence that we can continue to deliver the growth our investors expect.”
The motion picture business proved to be a source of strength for Lionsgate, thanks to the success of “The Hunger Games” prequel and “Saw X” at the box office. Segment revenue in this area increased by 53% to $443.2 million compared to the previous year’s quarter, while segment profit grew by 31% to $100.4 million.
However, Lionsgate’s television business faced challenges due to the impact of the Hollywood labor disputes, as well as declines in television licensing for its sitcom “Schitt’s Creek.” Segment revenue plummeted to $248.4 million, a significant drop from the $605.4 million reported in the prior year’s quarter. Additionally, profits in this segment decreased from $71.5 million to $8.1 million.
Lionsgate’s deal to spin off Starz is expected to be finalized in the spring. The company’s media networks operations, which include the streaming service, saw a 10% increase in revenue to $417.2 million, with profit growing by 73% to $85.5 million.
In conclusion, while the strikes in Hollywood have impacted Lionsgate’s earnings and television business, the success of “The Hunger Games” prequel has provided a significant boost to the company’s overall performance. With the upcoming spinoff of Starz, Lionsgate is poised to continue delivering growth and maintaining investor confidence.