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Starz said Thursday it earned 26 cents per share in the fourth quarter, falling short of expectations, though it posted revenue that was in line with what Wall Street anticipated.
The premium network behind shows including Black Sails and Ash vs. Evil Dead was expected to earn 30 cents per share on $427.6 million revenue.
Starz said its Starz Network added 500,000 new subscribers during the full year, ending with a record 23.6 million. Combined with Encore, its sister network, the company ended the year with 55.8 million subs.
“The growing consumer appetite and critical acclaim for our programming led to solid subscriber growth at our flagship Starz Network,” said CEO Chris Albrecht.
During a conference call with analysts Thursday, Albrecht said Starz is “near completion” of a stand-alone app that should be released in “the coming months,” so that consumers who don’t subscribe to Starz on traditional cable or satellite can pay to stream some Starz and Encore content over the Internet.
Starz is in discussions to merge with Lionsgate, the studio behind The Hunger Games and Orange Is the New Black, and both have seen their shares tank of late, with Starz down 33 percent so far this year and Lionsgate off 37 percent.
Much of Lionsgate’s big drop occurred earlier this month when it reported disappointing earnings, and Starz has fallen due to cord-cutting concerns that have affected the TV sector, and it also fell in tandem with Lionsgate, given that the two will presumably merge.
Albrecht hinted that the drop in its share price could complicate merger discussions.
“We only believe in a potential combination for Starz that fully appreciates the value of our business and provides an appropriate return to our shareholders,” he told analysts Thursday.
Starz closed 1 percent lower on Thursday to $22.79, leaving it with a market cap of $2.3 billion compared with $3 billion for Lionsgate. In after-hours trading, Starz dipped another 1 percent.
“While we believe recent stock market volatility left our stock meaningfully undervalued … the fundamentals of our business has not changed. We like our position of real strength,” said Albrecht.
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