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Starz Grows Earnings, Subscribers in Fourth Quarter

Premium TV company tops Wall Street forecasts

Starz released its fourth quarter 2014 financials on Wednesday morning before the U.S. stock markets opened, reporting revenue of $425.6 million and net income of $77.4 million. Basic earnings per share was $0.78, while fully diluted EPS was $0.74.

Each of those measurements are up from the comparable three-month period last year, and the two metrics that analysts regularly predict — revenue and EPS — topped estimates. Wall Street had forecast earnings per share of $0.53 on $423.25 million in revenue, according to consensus numbers compiled at Yahoo Finance. Zacks saw EPS coming in at a penny lower.

Q4 revenue at Starz Networks grew three percent primarily due to rate increases from various distributors.

At the end of December, Starz boasted 23.3 million subscribers — a new high — up from the prior quarter’s 22.5 million. Encore had 34 million subscribers — not a high.

For the full fiscal year 2014, Starz revenue was $1.664 billion, down from 2013’s $1.778 billion. However, profit and earnings per share rose year-over-year.

“Our fourth quarter results capped off a strong 2014, as we delivered solid increases in revenue, Adjusted OIBDA and a new high subscriber count at Starz. The 2014 performance at Starz validates the strategy undertaken to transform the company from primarily a movie-based provider to a true gold standard premium entertainment provider,” said Starz CEO, Chris Albrecht (pictured above). “We have tremendous momentum entering 2015 with our strongest and most diverse slate of original programming and opportunities to expand our reach globally. We believe Starz is well positioned for continued success.”

Starz has repurchased $71.0 million, or 2.3 million of its shares, from Nov. 1, 2014 to Jan. 31, 2015. Since trading began on January 14, 2013, Starz has repurchased 18.6 percent of its outstanding shares.

On Tuesday, Starz Class A common stock (STRZA) closed at $31.58 per share, down $0.12 or a negative 0.38 percent.

Also yesterday, the pay-TV channel promoted Alison Hoffman to executive vice president of Marketing.

Earlier in February, Starz and its biggest shareholder John Malone entered a stock exchange agreement with Lionsgate.

Under the deal, Lionsgate swapped newly issues shares representing 3.43 percent of its outstanding common stock on a pro forma basis for a piece of Malone’s Series A and Series B Starz common stock. Malone’s and his affiliates’ holdings represented approximately 4.51 percent of Starz common stock outstanding and 14.5 percent of the total voting power of Starz common stock.

Starz’s investor call is set for 1 p.m. ET, at which point this post will be updated with any pertinent information.

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