AMC Networks anticipates 5.5 million SVOD subscribers by year end including its new AMC+ premium offering, but lower distribution and ad revenue — in-part COVID related — squeezed earnings and profits at U.S. linear networks for the third quarter ended in September.
Total revenue dipped 9% to $654 million on as national networks declined 17% — the five nets being AMC, WE tv, BBC AMERICA, IFC and SundanceTV. Third quarter net income was $62 million ($1.17 per diluted share), compared with $117 million ($2.07 per diluted share) the year before.
The numbers are in line with secular video trends in linear TV and AMC posted better than expected results at its “international and other segment,” one analyst noted. “AMC remains exposed to the challenging advertising environment and incremental deterioration in MVPD subscriber trends. We reiterate our Market Perform rating,” said Doug Creutz at Cowen in an early note to investors.
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AMC said in a press release that it believes the COVID-19 pandemic “has had a material impact on its operations but does not expect the pandemic and its related economic impact to affect the company’s liquidity position” or its ongoing ability to meet its financial requirements.
In a statement with the numbers, CEO Josh Sapan said AMC “delivered solid results in the 3rd quarter and we continue to maintain a strong financial profile, with a solid balance sheet, very good liquidity and healthy levels of free cash flow. AMC Networks is fast becoming the global leader in SVOD services for targeted audiences, with our Acorn TV, Shudder, Sundance Now and UMC services set to exceed 4 million subscribers by year-end, outperforming our expectations. With the addition of our new AMC+ premium SVOD offering, we expect to have 5.0 to 5.5 million total SVOD subscribers, in aggregate, by the end of the year. Our strong content also continues to resonate with viewers, with AMC home to 4 of the top 6 cable dramas in 2020 among adults 25-54, including our newest series in The Walking Dead Universe, The Walking Dead: World Beyond ranking as the #1 freshman cable drama of the year operating income decreased 23.6% to $159 million.”
Sapan will discuss the numbers with analysts on a call this morning.
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