Liberty Media’s Starz Posts Stronger Quarterly Results
NEW YORK - John Malone's Liberty Media on Friday reported improved first-quarter financials for Starz LLC, which posted continued user gains to hit new highs in subscriptions to its Starz and Encore premium TV channels, and higher revenue at home shopping channel QVC.
The company also reiterated that it expects the split-off of Liberty Capital and Liberty Starz to be completed this summer.
Starz’s first-quarter revenue increased 28 percent to $391 million. Adjusted operating income before depreciation and amortization rose 24 percent to $131 million, and operating profit amounted to $124 million, up 25 percent.
The better results were driven by the addition of the Starz Media business, which was previously part of the firm's Liberty Capital tracking stock. Subscriber gains and higher subscription rates also boosted results as did ancillary revenue related to TV rights and the home video performance of original content.
Starz's first-quarter subscription units increased 10 percent, and Encore units rose 6 percent compared with the year-ago period. With 18.8 million subscribers at the end of the first quarter, Starz was up from the 18.2 million it had at the end of 2010. Encore subscribers rose from 32.8 million to 33.1 million in the latest quarter. The total gain of 900,000 subscribers in the latest period exceeded the 200,000 that Lazard Capital Markets analyst Barton Crockett had expected.
Meanwhile, revenue from the Starz Media businesses was down as two theatrical releases in the year-ago period compared to none this year and three home entertainment releases compared to only one.
"The first quarter marked another period of solid results and new highs in subscriptions to the Starz and Encore flagship channels," said Starz LLC president and CEO Chris Albrecht. "Performance of our current original dramatic series, Camelot, has surpassed expectations and continued our momentum with successful original programming.”
QVC, Liberty's biggest business and part of the Liberty Interactive Group, reported first-quarter revenue growth of 4 percent to $1.8 billion, as operating income before depreciation and amortization of $363 million was down less than 1 percent. The earthquake in Japan and start-up costs for QVC Italy were drags on the bottom line.
"We are pleased with QVC's results, particularly in light of the challenging economic environment for consumers and the tragedies in Japan," said Liberty Media president and CEO Greg Maffei. "At Starz, we posted strong financial results with robust subscriber growth and continue to execute on our original content strategy with solid viewership for both Spartacus: Gods of the Arena and Camelot.
Liberty Capital’s results for the latest quarter also improved.