Although revealing a significant bump in profit, AMC Networks — the entertainment conglomerate that includes a number of popular cable channels, including AMC, IFC and SundanceTV — reported slightly underwhelming Q2 revenue, behind a decrease in international sales, before the bell on Thursday.
The network behind “Better Call Saul” and “The Walking Dead” posted $710.55 million in revenue and $1.88 adjusted earnings per share for the three months ended June 30. It narrowly missed on analyst projections of $715.38 million in revenue, but easily cleared estimates of $1.41 EPS. AMC Network’s sales were up 3.8 percent year-over-year.
AMC Networks President and CEO Josh Sapan highlighted the company’s continued focus on content and multi-platform video distribution strategy in Q2.
“Our financial and operating performance in the second quarter and for the year, thus far, has been strong and we remain on track to deliver on our full-year total company outlook,” said Sapan in a release accompanying the earnings. “The success of our long-term focus on investing in marquee content and in distinctive, vibrant brands that attract passionate and engaged fans is reinforced by our wide distribution on new virtual MVPDs, including most recently YouTube TV; being home to four of the top five dramas on basic cable; and with Emmy nominations that span our networks and genres, including nominations for AMC’s “Better Call Saul,” IFC’s “Documentary Now!” and BBC AMERICA’s “Planet Earth II.”
After missing the mark by about $4.8 million on sales, AMC Network’s dip in international revenue stood out — with it falling $7 million from last year to $111 million for the quarter.
Still, AMC Networks has shown its ability to adjust to the changing TV landscape, with dwindling cable subscribers and stiff competition from streaming giants like Netflix, Amazon, and Hulu — and it was reflected in the company’s Q2 bottom line. AMC Networks pulled in $103 million in net come, marking a pronounced 25 percent increase from last year’s $77 million in profit.
At the same time, advertising revenues increased 2.6 percent year-over-year to $245 million.
The reinvention of its trademark channel, AMC, from a hub for old movies to an original content powerhouse — behind massive hits like “Breaking Bad,” “Mad Men,” and “The Walking Dead” — has been one of the most successful makeovers in television in the past decade.
“In 2006, no one was saying AMC should be a leader in original programming,” said AMC President and General Manager Charlie Collier at TheWrap’s TheGrill Special Event last week. “This was at a time when we were airing ‘Cool Hand Luke’ on a loop.”
Collier credited AMC’s transformation on a shift from being a linear TV network to a “global entertainment company” developing “ecosystems” centered on its fans. This crystalized for Collier when he attended a packed “The Walking Dead” season premiere at Madison Square Garden in 2015, with fans posing with motorcycles and excited to see their favorite show.
“You could look at the ratings of ‘The Walking Dead,’ and I’ll be the first to say it’s the largest show on television, but it’s slightly down,” said Collier. “But if you look at the ecosystem of ‘The Walking Dead, it’s up. And it’s why the logic of really trying to look at your business as an orbit around the fan is so relevant.”
Shares of AMC Networks had been on a steady run leading up to earnings, jumping about 15 percent in the last month and closing at $62.52 a share on Wednesday.
AMC Networks execs will host a conference call to discuss Q2 in greater detail at 10 am ET.