Why Starz Stock Fell on Wednesday

What: Shares of cable channel operator Starz sank as much as 15% today after its quarterly results missed Wall Street expectations. At 3 p.m., shares were down roughly 9%.

So what: Starz shares have climbed nicely over the past year on strong operating momentum and the possibility of an outright sale, but today's wide Q2 miss -- EPS of $0.59 on revenue of $418 million versus the consensus of $0.64 and $450 million, respectively -- is forcing Mr. Market to sober up a bit. And while customer subscriptions during the quarter increased by 1.5 million over the year-ago period, the number was still down slightly from Q1 this year, triggering concern among analysts that the popularity of its original TV shows might be fading.

Now what: Management remains confident in its lineup going forward. "Looking ahead, the balance of the 2015 originals slate is strong with 'Blunt Talk,' 'Survivor's Remorse,' 'Da Vinci's Demons,' 'Ash vs. Evil Dead,' and 'Flesh and Bone'," said CEO Chris Albrecht. "Our original programming pipeline was also fortified with a great, new addition thanks to our green light of Neil Gaiman's 'American Gods.' We are confident that robust original programming in combination with our quality movie offerings will further strengthen our distribution and subscriber relationships." Given Starz' still-attractive global growth opportunities and consistent focus on value-enhancing buybacks, I'd look into today's pull back as tempting long-termentry point.

The article Why Starz Stock Fell on Wednesday originally appeared on Fool.com.

Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Starz. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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