AMC Networks’ Q4 streaming gains can’t offset 30% revenue plunge, shares dive 19%

AMC Networks revenue plunged 30% in the fourth quarter as a small gain in streaming revenue failed to make up for big drops in content licensing, subscription and advertising sales. But the company posted a narrower loss than last year as it booked fewer charges, with those recorded in 2023 related to the sale of its 25/7 Media digital management agency and the value of its deal with the BBC.

Revenue and net income: Quarterly revenue for the parent of IFC Films and Sundance TV came in at $678.8 million, down nearly 30% from $965 million in the final three months of 2022. The figure nevertheless topped analysts’ forecasts for revenue of $673 million, according to Zacks Investment Research.

Net Loss:
AMC Networks reported a loss for the quarter of $21.8 million, a fraction of the $264.7 million loss it recorded last year, when it wrote off $403.8 million in content and booked $45.2 million in severance and other personnel costs following staff cuts.

Earnings per share: The company posted a loss of 50 cents per share, versus a loss of $6.11 per share a year ago. On an adjusted bases, the company reported earnings of 72 cents per share for Q4, topping the 64 cents per share predicted by Wall Street analysts, according to Zacks.

Outlook: The company said it expects full year revenue of about $2.4 billion, well below the $2.64 billion Wall Street was forecasting.

Stock-price: The disappointing outlook sent AMC Networks’ shares doiving 18.6% in morning trading, giving up $3.17, to $13.87. The stock closed Thursday’s session at $17.04, down 11% since the start of the year.

AMC Networks reported that its streaming revenue increased 4% to $145 million, as subscribers edged up for the first time in three quarters. It added 300,000 subscribers to reach 11.4 million, compared with the third quarter’s 11.1 million. In the 2022 fourth quarter, the company reported total subscribers of 11.8 million.

The streaming growth partly offset a slide of 8% in subscription revenue to $327 million due to declines in cable subscribers.

Content licensing revenue plummeted 30% to $343 million, which the company attributed mainly to the timing and availability of deliveries in the period. “Silo,” an AMC Studios produced series for AppleTV+, produced just $56 million in the recent quarter compared with $126 million a year ago. The 2022 quarter also included the early launch of some episodes of “The Walking Dead” and its spinoff, “Fear the Walking Dead,” the company noted.

AMC earlier this week announced new content, including the return of “Breaking Bad” star Giancarlo Esposito in “Parish,” and more from the “Walking Dead” franchise.

U.S. advertising revenue dropped 23% to $158 million due, mainly due to ratings declines for its cable channels. AMC Networks pointed to a “challenging ad market and fewer original programming episodes within the quarter,” for the drop, noting that it was partly offset by digital and advanced advertising revenue growth. International advertising revenue slipped 2% to $82 million.

International and other revenue fell 8% from the year ago to $100 million, with distribution and content licensing both seeing declines thanks to “lower production volumes” at 25/7 Media, which was ultimately sold in late December. The company booked an impairment charge of $19.8 million related to the business that month.

It booked a second impairment charge during the quarter of $42.4 million for its BBCA joint venture, which gives AMC operational control of BBC America. It attributed the charge to continued market challenges and linear TV declines driving down the value of the asset.

Affiliate revenue declined 16% thanks to cable subscriber declines and the loss of its contract FAST streamer FUBO.

CEO Kristen Dolan said in a statement that the quarter produced success “in the areas that will drive this company forward – programming, partnerships and profitability.”

“I’m encouraged that this year we were able to grow streaming revenue and strengthen our subscriber base,” she said. “I am proud of the progress we have made in a fast-changing environment, and the new and innovative ways we are engaging with viewers and our commercial and creative partners.” TheWrap