AMC Networks Second Quarter Profit Falls 16%, Misses Wall Street Forecasts

Solid growth in streaming revenue wasn’t enough to lift AMC Networks second-quarter results, as the parent of IFC and the Sundance Channel missed Wall Street expectations for the period.

Citing lower advertising sales and domestic affiliate fees, AMC Networks reported an 8% decrease in revenue to $679 million for April through June, down from $738 million in the 2022 second quarter and well off the $717.5 million projected by analysts surveyed by Zachs Investment Research.

The New York-based company reported a 16% drop in net income to $70.2 million, or $1.60 per share, down from $83.4 million, or $1.91 per share, last year.

Analysts were expecting profit of $1.77 per share.

Streaming results provided some relief, with revenue rising 13% to $137 million, driven by year-over-year subscriber growth and 2022 price increases.

But while streaming subscribers increased 6% to 11 million during the period, that was down 2% from 11.2 million in the first quarter, which the company said reflected the end to some promotions.

“Even during a period of industry-wide uncertainty and change, we are seeing the benefits of our strategy play out in our financial results, which for the second quarter include year-over-year increases in free cash, streaming subscribers, and streaming revenue, as well as healthy margins,” said CEO Kristin Dolan in a statement. “It’s clear we have the programming, the platforms and the partners necessary to continue to operate a very profitable business that delivers long-term shareholder value.”

Distribution and other revenues also fell for the company, owing in part to the decrease in production at 25/7, the company’s production services business. Specifically, distribution fell 24% to $79 million overall.

In fact, most of this loss is credible to 25/7. While subscription revenues increased 1% to $57 million owing to the favorable impact of foreign currency translation, content licensing and other revenues decreased 54% to $22 million due to a reduction in volume from 25/7. This reduction came about because of reduced demand for new content as well as series cancellations from third parties. Operating losses for the division were $12 million, a drop that is largely attributable to $25 million impairment charge related to 25/7 Media.

AMC’s second quarter saw a Free Cash Flow of $148 million, which was due to the acceleration of certain cash payments that were related to a legacy content licensing agreement.

More to come…

The post AMC Networks Second Quarter Profit Falls 16%, Misses Wall Street Forecasts appeared first on TheWrap.