AMC Networks Soars Past Wall Street Q3 Expectations As Interim CEO Matt Blank Takes Reins

In the midst of a major management change, AMC Networks reported third-quarter results well ahead of Wall Street expectations.

The cable programmer and niche streaming operator said it earned $2.68 per share on an adjusted basis, double the performance of a year ago and more than twice the Street estimate of $1.22. Revenue climbed 24% to $810.8 million, far better than the forecast for $706.1 million.

Content licensing was a major plus in the quarter, with revenue jumping 60%, which the company said was due to a higher number of distributed original programs compared with a year ago. The period also benefited from production resuming after Covid shutdowns in 2020.

Subscription revenues increased 14%, with higher streaming revenue and gains in streaming subscribers. The company said it is on track to achieve year-end goals in streaming. It has projected reaching 20 million to 25 million paying subscribers by 2025. The increases in streaming were partially offset by a low-single digit decrease in linear affiliate revenues caused by declines in the number of linear subscribers.

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Advertising revenues stepped up 22% to $200 million due to higher pricing and ad-supported streaming growth. More episodes of original programming helped overcome lower linear ratings.

Matt Blank, former Showtime CEO, joined the company earlier this year as interim CEO. He is stepping in for Josh Sapan, who guided the company for more than two decades. Sapan’s key lieutenant, COO Ed Carroll, has also announced his departure. The twin exits by the end of 2021 have raised questions in the industry and investment community about the future of AMC Networks as a stand-alone entity. In a favorable M&A climate and with consolidation continuing to reshape the media landscape, expectations are higher than ever that the company will at least explore its options. The company has stayed mum on the topic, which has arisen frequently over the years.

“We are building a streaming business that is sustainable and will be profitable over the long term, and with our owned IP, our library of high-quality content, and our strong legacy channels business, we have the right assets to drive growth and increase shareholder value,” Blank said in the earnings release.

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