Lionsgate DVD sales rise on Yuma, Chuck
Profit misses estimates on theatrical spending
By Danny King -- Video Business, 6/2/2008
JUNE 2 | A rise in DVD sales in its fiscal fourth quarter weren’t enough to stop Lionsgate from missing analysts’ earnings estimates as the studio boosted distribution and marketing expenses to expand its theatrical-release business.
DVD sales for the fiscal year jumped 18% to $623.5 million on titles such as 3:10 to Yuma and Good Luck, Chuck, helping the company boost its fiscal-year U.S. market share to almost 7% and its most recent quarter’s share to 9.1%, Lionsgate CEO Jon Feltheimer said on a conference call this morning.
“This is major-studio level market share,” said Feltheimer, who estimated that home entertainment sales would surpass $700 million for fiscal 2009.
Net income for the quarter ended March 31 increased 19% to $29.8 million, or 22¢ a share, from $25 million, or 19¢ a year earlier, the company said in a statement. Lionsgate was expected to earn 38¢ a share, the average analyst estimate in a Thomson Financial survey. Shares fell 1% on the news.
Sales for the film and TV studio advanced 54% to $511.5 million.
Lionsgate is looking to boost DVD sales with more children’s and Blu-ray Disc titles. Since March, the company has inked distribution agreements for MGA’s new Animated Little Tikes Entertainment label and U.K. publisher Hit Entertainment, whose series include Barney, Bob the Builder and Thomas & Friends.
“This will catapult Lionsgate into the Top 3 studios in nontheatrical children’s entertainment,” Lionsgate president Steve Beeks said, estimating that industrywide U.S. Blu-ray sales were $150 million in the first quarter and will be $1 billion for the calendar year.
For the quarter, Lionsgate had a fiscal-year loss of $74 million, or 62¢ a share, compared with net income of $27.5 million, or 25¢, a year earlier. Marketing and distribution costs rose to 47% of sales, from 41% a year earlier.
Fiscal 2008 sales jumped 39% to $1.36 billion and will increase to about $1.5 billion for the current fiscal year, Feltheimer said today. He didn’t give an earnings forecast.
