Starz Fourth-Quarter Earnings, Subscribers Rise
Premium TV company Starz on Friday reported improved fourth-quarter earnings and subscriber results.
The company, led by CEO Chris Albrecht, posted quarterly earnings of $72.5 million, compared with $48.2 million in the year-ago period. That exceeded Wall Street estimates. Operating profit rose 21 percent from $85.6 million to $103.5 million. Adjusted operating income before depreciation and amortization (OIBDA) increased 16 percent to $117.2 million.
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Revenue of $414.7 million was down 2 percent from $422.2 million in the year-ago period, though.
In the fourth quarter, Starz subscriptions rose to 22.2 million from 22.0 million as of the end of September.
That brought total company subscriptions to 57.1 million at the end of 2013, compared with 57.0 million at the end of September and 56.0 million at the end of 2012.
Starz accounted for 22.2 million subscribers, up from 21.2 million at the end of 2012. The Encore services accounted for 34.9 million at the end of 2013, down from 35.0 million at the end of September, but up from 34.8 million at the end of 2012.
"This was another strong quarter for Starz and a strong end to 2013," said Albrecht. "During 2013, we delivered solid growth in revenue, adjusted OIBDA and subscriber performance. Over the past year, we increased our investments in exclusive original programming at Starz and implemented new offerings to our Encore thematic channels for African-American, Latino, Baby Boomer and Millennial audiences."
Added Albrecht: "The new Starz original series Black Sails is off to an excellent start with worldwide audiences and the strongest-ever debut for a new Starz original series in the U.S. Through the first three episodes of the debut season, more than 2.9 million viewers in the U.S. have watched on Starz, with data for on-demand and online viewing yet to be included in the tally. Global sales of Black Sails were robust."
Looking ahead at other programming plans, the CEO said: "The second season of Da Vinci's Demons and our new 2014 series, Power, Outlander and the recently greenlighted Survivor's Remorse, are on the schedule as we finalize the programming slate for the fourth quarter. We remain on track to grow our original programming hours to 65-75 hours in the next few years."
At the Starz Networks unit, quarterly revenue increased 2 percent primarily as a result of annual rate increases from distributors. Adjusted OIBDA dropped 2 percent, though, amid higher advertising expenses associated with the January premiere of Black Sails. "An increase in cooperative marketing efforts with our distributors and costs associated with becoming an independent public company also contributed to the decrease," the company said.
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At Starz Distribution, quarterly revenue fell 14 percent due to fewer high-performing releases than in the year-ago period, which had included the Weinstein Co. film Lawless and the first season of Starz original series Magic City. The unit's adjusted OIBDA loss narrowed significantly, though, primarily due to lower production and acquisition costs "resulting from a decrease in impairments of investment in films and television programs as compared to the prior period."
Starz Animation posted lower revenue and adjusted OIBDA due to fewer projects in production at its Film Roman studio, the company known for its animation work on The Simpsons.