AMC Networks Profit Rises Amid Revenue Gain, Legal Settlement
AMC Networks on Thursday reported improved second-quarter financials.
The owner of such cable networks as flagship AMC, the home of The Walking Dead and Mad Men, IFC, Sundance Channel and WE tv, said quarterly earnings came in at $135.7 million, compared with $41.5 million in the year-ago period. The figure for the latest quarter exceeded Wall Street expectations and was boosted by a one-time gain of $133 million from a legal settlement with Dish Network in the Voom HD channels dispute between the satellite TV firm on one side and Cablevision Systems and AMC on the other.
Excluding that gain, earnings would have declined due to higher tax expense. But operating earnings including and excluding the gain were higher than in the year-ago period. Revenue for the company, led by CEO Josh Sapan, rose from $328 million to $379 million, up 15.8 percent driven by higher distribution and advertising revenue thanks in part to the company's original programming.
Wall Street analysts had on average predicted second-quarter earnings of $57.6 million on revenue of $368 million.
Original series helping advertising revenue in the latest quarter included Mad Men and The Killing.
Second-quarter revenue growth was led by a 17.5 percent increase in distribution revenue to $206 million, which the company said was "primarily attributable to growth in affiliate fees, as well as increases in home video and digital distribution revenues." Advertising revenue rose 13.7 percent to $147 million "due to strong demand for our original programming."
"In the second quarter, our successful original content drove our overall financial results," said Sapan. "Our original programming continues to fuel the performance of our networks and underpin the company's growth, with last month's 39 Emmy Award nominations for AMC, IFC and Sundance Channel, the most nominations of any basic cable programming group, contributing to our momentum."
"Key for the [earnings] call will likely be commentary on the refreshing of the content cycle with Breaking Bad set to end in the third quarter and Mad Men the following year," said Stifel, Nicolaus analyst Benjamin Mogil before Thursday's earnings report.