Starz Slips, Misses Q4 Earnings Estimates

Chris Albrecht-led company satisfies Wall Street’s revenue forecast, however

Starz missed Wall Street’s earnings estimates for the fourth quarter of fiscal 2015, though it did manage to make media analysts’ revenue forecasts come to fruition.

The company reported earnings per share (EPS) of $0.26 on $427.6 million in revenue. Leading up to today, Wall Street had forecast EPS of 30 cents on $426.17 million in revenue, per Yahoo Finance. Actual revenue ticked down just 1 percent from 2014’s comparable final quarter, though Starz’s profit was cut by nearly two-thirds.

One reason operating income decreased in Q4 2015 was due to costlier programming this time around. “Blunt Talk,” “Ash vs Evil Dead” and “Flesh and Bone” are more expensive productions than 2014’s “The Chair” and “The Missing” were.

Starz increased its subscriptions by 300,000 in the final three-month period of the year. When all was said and done, the premium cable channel closed 2015 at 23.6 million subscribers.

“In 2015, Starz demonstrated the strength of its core subscription business and made meaningful progress on the strategy of building a strong slate of original programming focused on targeting diverse and underserved audiences,” CEO Chris Albrecht stated. “We expanded distribution of our content, with the recent successful launch of Starz on Amazon and there is more to come in the future. We are very excited to be nearing completion of a new Starz app that will allow distributors to bring the Starz experience directly to more consumers.”

“The growing consumer appetite and critical acclaim for our programming led to solid subscriber growth at our flagship Starz network,” he continued. “The network also received six Golden Globe nominations. ‘Ash vs Evil Dead’ enjoyed a successful first season both domestically and internationally and the third season of ‘Black Sails’ is off to a strong start. These are very exciting times for Starz with an outstanding 2016 Starz original programming slate.”

STRZA stock slipped in after-hours trading immediately following the release of the company’s fourth-quarter figures.

Senior management will host a conference call to discuss the financial results at 5 p.m. ET.