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Second-quarter earnings hit $103 million, compared with $77 million in the year-ago quarter. Earnings per share of $1.54 (or $1.88 per share on an adjusted basis) compared with $1.05 (or $1.28) in the year-ago period. Wall Street had on average expected earnings of around $1.41 per share.
Revenue for the latest period increased 3.8 percent to $711 million, driven by the company’s U.S. networks, falling slightly below Wall Street expectations.
U.S. distribution revenue rose 7.8 percent, while advertising revenue climbed 2.6 percent. “The increase in advertising revenues principally related to higher pricing partially offset by lower delivery,” the firm said. Analysts had mostly expected a slight ad decline.
The company’s U.S. networks also reported higher operating expenses, “primarily attributable to higher programming expenses partially offset by a decrease in marketing expenses.”
AMC Networks president and CEO Josh Sapan during a morning analyst call returned to a familiar theme as he pointed to market openings for AMC amid cable TV’s woes, including cord-cutting and streaming competition. With consumers cutting back to fewer channels and using streaming services like Netflix, Sapan said AMC thrived with popular shows like The Walking Dead, Fear the Walking Dead, Better Call Saul and Into the Badlands as it targeted passionate and engaged fans.
He also touted AMC’s upcoming drama Dietland, Marti Noxon’s adaptation of Sarai Walker’s 2015 novel that recently got a 10-episode order as part of a co-production between Skydance Television and AMC Studios. “We think she’s one of TV’s sharpest voices,” Sapan added of Noxon, whose recent TV credits includes Bravo’s Girlfriends’ Guide to Divorce and HBO’s Sharp Objects.
Amid the “loosening” of the traditional cable bundle and new virtual MVPD players like YouTube Red and Sling TV emerging, rival cable networks are talking about winnowing out, converting or closing down weaker channels, Sapan observed. Not AMC.
“This is not the case for us. We are home to a collection of five top-tier channels,” which AMC will continue to nurture, the exec assured investors. Sapan added his network would continue a long-term focus on investing in popular content and brands it owns to attract passionate TV fans.
He also touted AMC’s offerings to traditional distributors, including its new AMC Premiere product for Comcast Xfinity TV customers. “We think this offering acknowledges the importance of our shows and brands, and how we can drive value for distributors,” Sapan told analysts.
With Discovery Communications earlier this week unveiling a deal to acquire Scripps Networks Interactive for $14.6 billion, some on Wall Street have suggested that AMC Networks could also be in the mix as a possible buyer or seller down the line. “We do strongly believe due to the valuations all basic cable network operators have been trading at recently, deals in the space of some type are almost sure to happen,” FBN Securities analyst Robert Routh said in a recent report.
Aug. 3, 10:00 a.m. Updated with comments by Sapan.
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