AMC boasted impressive numbers when revealing its Q1 stats, which blew away Wall Streets' expectations.
AMC's net income rose 28% to $2.54 per share from the $1.98 it boasted in the first quarter of last year. Wall Street analysts had predicted $2.19 as a consensus for the network. It is a new company record for the first quarter.
Investors thoroughly enjoyed the quarterly numbers, which sent AMC Networks shares up nearly 6% to $56.25 in the morning trading.
CEO Josh Sapan proudly proclaimed AMC's ability to combat the rising popularity of online streaming services. As the network's programs remain strong, “our ad-supported networks provide an increasingly rare opportunity for advertisers,” Sapan said. He went on to add “our size, focus and collection of assets are unique strengths in this environment.”
Domestic ad revenue, however, did decline 9% in the quarter, from $248 million in last year's same quarter to $226 million. It is likely in part due to a slip in ratings of the largest show on cable, The Walking Dead, which still posts impressive scores despite losing a portion of its audience.
“We are doing two things and they are both, we think, highly supportive of each other,” Sapan said. With ad-supported programming, “the viewer is highly highly engaged” making them very valuable to ad-buyers. “Secondarily, a number of those people are happy to pay extra money to buy that material in an ad-free environment … and that’s a compliment to the content. … It allows us to live in two manners of economic exploitation and we think that is good for our health,” he went on. “You hear other companies say, ‘We have a lot of channels, but we want to focus on five.’ Well, we only have five. We don’t have 10 or 20.” The limited number of channels, Sapan claims, allows ad-buyers to focus on a specific target audience.
According to Sapan, about two-thirds of AMC Networks revenue comes from distribution fees and sales of content to streaming services and networks around the world. The remaining third comes from advertising, which "we will probably see that accelerate toward the non-ad-supported pieces over time," Sapan says.
“With The Walking Dead, for 18-49-year-old viewers, there just aren’t other shows that have a comp,” Sapan said. “The rest of AMC’s original programming slate, and increasingly BBC America’s is in the same neighborhood” as broadcast TV.0comments
The Walking Dead will return for its ninth season in the fall. Fear the Walking Dead airs Sundays at 9 pm ET on AMC. For complete coverage and insider info all year long, follow @BrandonDavisBD on Twitter.