AMC Networks’ Q1 Ratings Declines Drop U.S. Ad Revenue by Double Digits

Josh Sapan-led company whiffs on first quarter earnings forecasts

Greg Lewis/AMC/Sony Pictures Television

AMC Networks did not experience a good start to the new year, missing on analysts’ earnings and revenue estimates for the first quarter of 2020. Shareholders can blame lower U.S. TV ratings for much of that.

Wall Street had forecast earnings per share (EPS) of $1.86 on $738.87 million in revenue, according to a consensus compiled by Yahoo Finance. AMC reported EPS of $1.47 on revenue of $734 million.

That revenue figure was down 6.4%, or $50 million, from Q1 2019. Net income of $69 million was less than half of last year’s comparable figure.

Domestically, ad revenue decreased 10.8% on lower TV ratings. AMC assigned some of that blame, from mid-March on, to COVID-19.

The company’s national networks include AMC, BBC America, IFC, SundanceTV, WE tv and AMC Studios. Combined, revenues at those entities declined 8% from the same quarter in 2019. Their operating income fell 22.4%.

Internationally, revenues were essentially flat.

As part of the Tuesday filing, AMC Networks updated shareholders on its SVOD gains. The company says it now expects 3.5 million to 4.0 million paid subscribers across its four SVOD services: Acorn TV, Shudder, Sundance Now and UMC (Urban Movie Channel) by year-end 2020. That is two years ahead of its self-set pace.

“In what has been a unique operating environment, AMC Networks continues to generate significant levels of free cash flow and remains well capitalized with a strong balance sheet and strong liquidity,” AMC President and CEO Josh Sapan said in a prepared statement. “We continue to make significant progress on our digital initiatives, including strong subscriber growth across our Acorn TV, Shudder, Sundance Now and UMC (Urban Movie Channel) SVOD services, as well as Acorn TV launching in the UK.”

“Our portfolio of networks is delivering increased viewership in recent weeks, including a strong debut of the third season of ‘Killing Eve’ and strong performance for the most recent and exceptional season of ‘Better Call Saul,’” he continued. “Our continued investment in key areas — creating strong content and valuable IP; growing our targeted SVOD services; and maximizing the value of our linear channels — is enabling us to navigate this challenging time and will continue to serve us well when this environment stabilizes and as we look beyond this immediate period to the remainder of 2020 and ahead to 2021.”

AMC Networks stock (AMCX) closed Monday at $23.90 per share. The regular U.S. stock markets trading day opens at 9:30 a.m. ET.

Sapan and other senior executives hosted a conference call Tuesday to discuss the quarter in greater detail.