Starz saw its revenue slip in the second quarter of 2016, and company accountants blamed the decline on fewer “significant” new Weinstein Company releases.
As such, Lionsgate’s newest (soon-to-be) subsidiary missed Wall Street’s top-line mark, but Starz hit the profit distribution prediction right on the nose. Media analysts had forecast earnings per share (EPS) of 54 cents on $421.17 million in revenue, per Yahoo Finance. Reported consolidated revenue was actually a softer $402.6 million.
Revenue at Starz Networks ticked up 3 percent versus the comparable quarter in 2015, thanks to rate increases this time around. Distribution was the problem, as the sales figure there dropped 23 percent year over year. Starz has a distribution deal with Weinstein films, and “Jane Got a Gun” was no “Paddington.”
Starz added 200,000 new subscribers in Q2, bringing the company’s running record up to 24.2 million.
Not surprisingly, CEO Chris Albrecht focused on positives for his prepared media release remarks.
“We performed very well in the second quarter, delivering strong financial results at Starz Networks and establishing a new record high of 24.2 million subscribers for Starz,” he said. “‘Outlander’ and ‘The Girlfriend Experience’ grew viewership across multiple platforms demonstrating that our original programming continues to make Starz a ‘must-have’ service for consumers. We are thrilled with the record-setting viewership for the third season premiere episode telecast of “Power” and look forward to a strong third season from the critically-acclaimed ‘Survivor’s Remorse.'”
“The new Starz app is proving to be an enormous value proposition for consumers, as people look for additional ways to access our highly-rated, award-winning and diverse original programming and vast library of movies,” Albrecht added. “We were excited to announce the planned merger with Liongate, which will enable the combined company to capitalize on content opportunities across multiple platforms. As we move forward, we are confident in the prospects for Starz and believe that we can be even stronger in combination with Lionsgate.”
STRZA stock closed down 40 cents per share on Thursday.
Last month, Lionsgate announced that it would buy Starz for $4.4 billion in cash and stock. While executives at the new parent company said at the time that the plan is to keep Albrecht atop Starz, a weird loophole discovered by TheWrap explains that he can actually be fired without cause after Jan. 7, 2017.
Executives will host a conference call at 5 p.m. ET to discuss the financial results, and surely more Lionsgate chatter.