Starz First-Quarter Earnings Rise, Subscribers Drop
Premium TV company Starz on Thursday reported improved first-quarter earnings, but lower subscriber figures.
The company, led by CEO Chris Albrecht, posted quarterly earnings of $66.8 million, compared with $58.2 million in the year-ago period. Operating profit and adjusted operating income before depreciation and amortization (OIBDA) each increased 8 percent. Revenue rose 5 percent to $420 million.
In the fist quarter, total company subscriptions declined to 56.3 million from 57.1 million as of the end of 2013 and 56.7 million as of the end of the first quarter of 2013. The company cited "retail price increases, tighter credit policies, reduced promotional activity and/or programming package changes" at certain pay TV distributors as the reason.
The Starz-branded services ended March with 21.9 million subscribers, down from 22.2 million as of the end of 2013, but up from 21.6 million at the end of the comparable year-ago quarter. Encore ended March with 34.4 million subscriptions, down from 34.9 million at the end of 2013 and 35.1 million in the year-ago period.
Still, Starz Networks unit revenue rose 3 percent in the first quarter as the company cited "higher effective rates," but profitability was virtually unchanged.
Revenue and profits at the Starz Distribution arm came in higher thanks to the company's deal with The Weinstein Co.
Management on Thursday touted the ratings for the first season of Michael Bay's original pirates series Black Sails and the upcoming Power from Curtis "50 Cent" Jackson.
"Our business performed well during the first quarter, setting the stage for what we believe will be a strong 2014," said Albrecht. "We are building the Starz brand, investing to create compelling original programming and fortifying our unique position with viewers and our distribution partners. The result of these efforts was another quarter of revenue and adjusted OIBDA increases."
He added: "With the recent additions of The Missing and The Chair, Starz has slated a record seven Starz Original series for 2014 with 55 hours of original programming. We are very pleased that Black Sails concluded its first season with strong viewership and robust demand worldwide, including a recent licensing pact with Amazon Prime Instant Video in the U.K."
Plus, Da Vinci's Demons' second season is "performing well and in a consistent manner with its successful first season," Albrecht added.