Starz reversed recent U.S. subscriber losses in its fiscal fourth quarter, but disclosed a restructuring charge of $177.4 million due to a “reassessment” of its content portfolio.The report Thursday by the streaming programmer follows a quarterly earnings release last week from Lionsgate, which swung to a profit in the period ended March 31 on sharply higher revenue. The split of Starz and the film and TV studio became official in early May.Total revenue for Starz reached $330.6 million in the quarter, with adjusted OIBDA of $93.3 million, with the latter figure reflecting the restructuring charge. The content review is “part of Starz’s broader effort to align its operations and cost structure as a newly independent, standalone public company,” the earnings release said.The company said it “remains confident in its financial trajectory,” targeting about $200 million in adjusted OIBDA for calendar 2025.The Starz Networks unit, which includes operations in the U.S. and Canada, ended the quarter with 12.3 million streaming subscribers in the U.S., up 530,000 from the previous quarter. Total U.S. subscribers, including linear TV, came in at 18 million, up 320,000. The company credited the Season 4 premiere of Power Book III: Raising Kanan.Canada saw a sequential decline due to a carriage dispute that blacked out Starz. The company maintained that the “extremely low” average revenue per user derived from Canadian linear subscribers meant that the blackout “did not have a material impact” on revenue or adjusted OIBDA.“For the quarter, we are very pleased to report the company’s strong operating and financial results, and excellent subscriber growth. We delivered significant U.S. OTT subscriber gains, growing the total subscriber base in the U.S. by almost 2%,” CEO Jeffrey Hirsch said.Shares in Starz have gotten off to a fast start, more than doubling in their first three weeks. The stock closed Thursday trading at $16.51, up more than 5%.Doug Creutz, a media analyst with Cowen & Co., initiated Starz coverage earlier this month with a “hold” rating on its shares and a 12-month price target of $15. The stock is “very inexpensively priced for a pay TV service” with about 70% of its subscriber base coming from direct-to-consumer streaming. Another plus, he added, is a lack of exposure to the suddenly volatile ad market.Despite those positives, Creutz cautioned, “accelerating subscriber losses over the last three years need to be halted in order to give us confidence that the business can sustain current earnings power.”
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