Starz Quarterly Earnings Fall Short of Expectations

Courtesy of Starz
'Ash vs. Evil Dead'

The cable network reported $404.2 million in revenue and earnings of 56 cents per share.

Starz said Thursday it earned an adjusted 56 cents per share in the third quarter, falling shy of the 59 cents per share that analysts had projected.

The company reported $404.1 million in revenue with $329.3 million coming from Starz Networks. Subscriptions at Starz rose to 23.3 million, 1 million more than a year ago. Subscriptions for Starz and Encore together, though, fell 2 percent to 55.8 million.

Revenue for Starz Networks was up 1 percent as the addition of subscribers was offset by lower rates at certain distributors. Starz Distribution, meanwhile, saw an 11 percent decrease in revenue because of less from AMC Networks for The Walking Dead.

Some of the lackluster results can be attributed to distractions created by big mergers among distributors, such as DirecTV-AT&T and plans for combining Charter Communications and Time Warner Cable.

"We've been told this is not a Starz-specific issue and has affected other premium channels as well," said CEO Chris Albrecht.

Various deals and marketing arrangements with distributors will come "as all this stuff settles down," said Albrecht.

The cable network said that its original series, Ash vs. Evil Dead, will debut on Halloween in more than 100 countries and the company expects deals for 150 countries by the end of the year.

"Starz original programming is resonating with consumers, which is creating significant opportunities for us to further develop our brand with both traditional partners and new distribution platforms," said Albrecht.

Albrecht said Power is the network's most-watched original series in its history with nearly 7 million viewers per episode. He also praised Survivor's Remorse, Outlander and Flesh and Bone.

He also said 2015 will be the company's "largest year of investment" due to production costs of so many shows.

Shares of Starz fell 1 percent Thursday to $37.20 and did not trade after the closing bell.

Email: Paul.Bond@THR.com

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