Copyright Deadline
AMC Networks posted double-digit declines in advertising and affiliate revenue in the third quarter, falling short of Wall Street analysts’ consensus earnings forecast. Despite the continued downturn in the company’s legacy linear TV operations, CEO Kristin Dolan pointed to streaming gains as a sign that a digital-focused business is starting to emerge. “Our performance in the third quarter marks a key milestone in our transition from a cable networks business to a global streaming and technology focused content company,” Dolan said in the earnings release. “We have built the components of a modern media business that is nimble, independent and well suited to today’s environment and whatever comes next.” Revenue for the parent of AMC, IFC and BBC America dipped 6% in the quarter ended September 30, coming in at $561.7 million. Earnings per share of 18 cents compared with 91 cents a year ago. While earnings missed analysts’ target of 34 cents per share, revenue topped the Street’s expectations. Advertising revenue fell 17% from the year-earlier period, settling at $110 million, with the company blaming linear ratings declines and lower pricing in the marketplace. Affiliate revenue, a longtime bedrock for cable network parents that has been disrupted by the streaming era, declined 13% to $142 million. The company blamed the affiliate slump on “basic subscriber declines, and to a lesser extent, contractual rate decreases in connection with renewals.” Content licensing revenues decreased 27% to $59 million primarily due to the timing and availability of deliveries in the period. Streaming revenues from the company’s stable of niche services like AMC+, Shudder and Acorn TV increased 14% to $174 million, with the company chalking that up mainly to price increases. Dolan reaffirmed prior guidance that streaming will be the company’s dominant source of revenue for the full year. The number of streaming subscribers inched up 2% from the year-earlier period, hitting 10.4 million. Free cash flow of $42 million in the quarter fell 22% from a year ago but Dolan said the company will reach its target of $250 million in free cash flow for the full year.
