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AMC Networks on Monday reported improved first-quarter financials that handily exceeded Wall Street expectations.
The cable networks company, led by CEO Josh Sapan, posted a profit from continuing operations of $121 million, or $1.66 per share, compared with $72 million in the year-ago period, or $1.04 cents per share on an adjusted basis. In dollar terms, that was up 69 percent.
Revenue rose 27.5 percent to $668.7 million. Wall Street analysts had on average expected earnings of $107.5 million, or $1.48 per share, on revenue of around $655.7 million.
Benefiting the latest quarterly results were the performance of original series, particularly the strong ratings for the fifth season of The Walking Dead and the solid launch of Better Call Saul. Advertising revenue at the company’s U.S. networks rose 25.3 percent to $260 million, with total domestic networks revenue up 25.4 percent to $563 million.
International networks and other revenue, including IFC Films, rose 38.9 percent to $106 million, “primarily as a result of the company’s acquisition of Chellomedia.”
Operating income increased thanks to 42.5 percent growth at the U.S. networks and a decrease of $11 million in operating loss at the international and other segment. “Results reflected the impact of the Chellomedia and BBC America acquisitions,” the firm said. The company late last year bought a 49.9 percent stake in BBC America from BBC Worldwide, the commercial arm of U.K. public broadcaster BBC.
During a conference call with analysts, Sapan said the company’s shows attract passionate fans and are therefore well suited for digital distribution and will perform in an era driven by DVRs and slimmed-down cable bundles.
“Our shows are not just the show that’s on at 10, that’s after the show that’s on at 9, that’s hoping to pick up whatever random audience happens to have hung around,” he said. “We think that approach is less effective in a world in which the viewer exerts greater intention, choice and control.”
He also praised several shows, including Dr. Who and Orphan Black, a couple of titles AMC acquired an interest in by taking a stake in BBC America.
“AMC Networks is off to a strong start in 2015, with returns on our content investments generating significant growth in our revenues, adjusted operating cash flow and operating income,” said Sapan. “Viewers continue to embrace our original programming, including AMC’s The Walking Dead and our new original series Better Call Saul, which was the most-watched new series on cable in key advertiser demos, this broadcast season.”
Added the CEO: “Our international business is developing well, with our portfolio of global channels and strong local brands benefitting from growing demand from distributors. AMC Networks continues to operate from a position of strength, with high-quality programming, clearly defined brands and strong audience support that drives financial performance and our ability to create value for shareholders.”
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