AMC Networks Beats on Earnings But Misses Revenue Forecast as Domestic Ad Sales Drop

Stock buyback and new tax incentives help “Walking Dead” home top Wall Street’s per-share mark

Last Updated: March 1, 2018 @ 6:21 AM

AMC Networks unveiled its fourth-quarter and full-year 2017 financials on Thursday morning. There was some good news and some bad in there, and we’ve got the reasons for both.

Wall Street had forecast Q4 earnings of $1.49 per share on $730.78 million in revenue, according to a Yahoo Finance-compiled consensus. AMC Networks actually reported earnings of $1.68 per share on $727 million in revenue, besting media analysts’ expectations at the bottom-line but missing up top.

The per-share earnings rose year over year due to a large stock buyback program (leading to less dilution) and some Trump tax incentives, the latter of which kicked off in late Q4 2017. The revenue miss and decline from 2016’s year-ending quarter is in large part due to a near-10 percent ad sales drop at the national networks — AMC, WE tv, BBC America, IFC and SundanceTV — due to lower Nielsen performance. It has not been an awesome season for hit AMC series “The Walking Dead,” TV ratings-wise.

Still, full-year revenues reached a record $2.8 billion, and that makes AMC Networks President and CEO Josh Sapan happy. How happy? Read his remarks in full below.

“AMC Networks delivered record financial results in 2017, increasing net revenues and adjusted operating income for the seventh consecutive year since becoming a public company, and generating significant free cash flow that we are using to invest in key strategic initiatives and our networks.” company President and CEO Josh Sapan said in a statement accompanying the SEC filing.

“Our recent distribution deals with the streaming services fuboTV and Philo make AMC Networks available on more virtual MVPDS than any other independent programmer, proving the value of our discrete brands and our desirable, high-quality content,” he continued. “Our core networks continue to perform well, with AMC delivering 4 of the top 10 dramas on cable in 2017, with ‘The Walking Dead,’ ‘Fear the Walking Dead,’ ‘Better Call Saul’ and ‘Into the Badlands.'”

“AMC Premiere continues to gain traction, with YouTube TV recently joining Comcast Xfinity in making our ad-free AMC streaming option available to its subscribers,” Sapan said. “Our owned streaming services Sundance Now and Shudder are seeing healthy subscriber growth and their momentum, coupled with the growth of the other streaming services we have invested in, including Acorn TV, Urban Movie Channel, and the BBC and ITV’s Britbox, highlights consumer demand for subscription streaming services with specialized content.”

“As we continue to evolve and adapt in a world of changing viewer consumption habits, we believe AMC Networks occupies a position of unique strength and are confident that our size, our focus, and our portfolio of assets will enable us to continue to deliver strong financial results to our shareholders,” he concluded.

AMCX stock closed at $52.57 on Tuesday, down 31 cents per share. The U.S. stock markets reopen at 9:30 a.m. ET.

Shares are currently trending down a hair in pre-market trading — so perhaps Sapan oversold his results. (It’s kind of his job to.)

Sapan and other AMC Networks executives will host a conference call at 10 a.m. ET to discuss the results in greater detail.

On Monday, AMC announced that it plans to acquire the entirety of Robert Johnson’s RLJ Entertainment, which owns Acorn TV. The deal valued RLJ at about $60 million.