AMC Networks Stock Up, Starz Down After Earnings Reports
The stocks of TV networks operators Starz and AMC Networks went different directions in early Thursday trading following the companies' latest earnings reports.
Starz shares opened lower after the premium TV firm reported a slight revenue decline and lower profit for the first quarter. As of 9:45 a.m. ET, Starz's stock was down 2.5 percent at $23.63.
"Unusual factors contributed to the decline, but Starz also suffered from lower rates in recent distributor renewals, which might spark at least modest concern for a stock trading at a ... multiple in line with Time Warner, owner of the faster-growing HBO," wrote Lazard Capital Markets analyst Barton Crockett, who has a "neutral" rating on the stock.
"Starz reported results that were slightly lower than our and consensus estimates," said Stifel, Nicolaus analyst Benjamin Mogil. "While both Starz and Encore subscriber count was up, we estimate average revenue per user continues to erode due to [lower] fourth-quarter [pay TV distributors'] pricing deals."
Starz has focused on original programming and has had recent success with the likes of Da Vinci's Demons.
Meanwhile, shares of AMC Networks, the cable network home of Mad Men and The Walking Dead, were up 5.2 percent to $67.99 as of 9:45 a.m. ET. The stock hit its latest all-time high of $69.24 earlier in the trading session. The gain came after the company had exceeded Wall Street financial projections in the first quarter.
"Media earnings season closes with a bang, not a whimper," Sanford C. Bernstein analyst Todd Juenger said in the title of his initial report about the results. He has an "outperform" rating on the stock.
Mogil, who has a "buy" rating on AMC Networks, said "results were well ahead of ours and consensus estimates as advertising was much stronger than expected."
Alan Gould, analyst at Evercore Partners, reiterated his equal-weight rating on AMC shares, saying: "The strong first-quarter results do not necessarily foreshadow a beat relative to [earnings] consensus for the remainder of the year."