Lionsgate Reassures Investors After Earnings Report
Last Wednesday, Lionsgate’s earnings reports showed, that for its fiscal fourth quarter, the company had fell short of expectations which were high after the over performance of The Hunger Games at the box office. According to Variety, because of the recent merger deal with Summit, the studio had “$38 million in transcation and purchase accounting costs” which partly led to Lionsgate stating a loss of $22.7 million dollars in comparison to a “profit of $49 million the year before.”
Now Lionsgate CEO Jon Feltheimer has aleviated some Wall Street worries projecting “that 90% of earnings from ‘The Hunger Games’ have not yet shown up on the studio’s bottom line.” Feltheimer also told analyists during a conference call that the franchise will continue to be a steady source of profitablility for Lionsgate with the film’s release in China and the release of sequel Catching Fire, for which the studio has already sold foreign distribution rights at Cannes:
Feltheimer said production will begin in September on “The Hunger Games: Catching Fire,” the second film in the franchise based on author Suzanne Collins’ trilogy. He noted that Lionsgate racked up $170 million in international sales at Cannes, where it began selling foreign markets for “Catching Fire,” which will open on Nov. 22, 2013.
Patrick Wachsberger, the co-chair of Lionsgate Motion Picture Group, told analysts that “Catching Fire” had done “extremely well” in Cannes. “We got the best deals,” he added.
The former Summit chief also predicted “Catching Fire” will reach $400 million in foreign B.O., based partly on the performance of the second “Twilight,” which outgrossed the first in foreign markets by 50% (the first grossed $192 million overseas and the second took in $296 million).
“Hunger Games” has grossed nearly $400 million domestically and $250 million internationally, with China opening next month.
Feltheimer also discussed further promising franchises for Lionsgate including the final Twilight, hopeful franchise-starter Ender’s Game and other teen novels in development:
“We have established ourselves as the No. 1 studio in young adult franchises,” he said during the call.