AMC beats as hit shows propel revenue, shares soar
(Reuters) - AMC Networks Inc (AMCX.O) reported better-than-expected quarterly results as the soaring popularity of shows such as "Walking Dead" and "Mad Men" boosted revenue, sending its shares up as much as 14 percent to an all-time high.
AMC also said it was in talks with former parent Cablevision Systems Corp (CVC.N) over the sharing of $700 million in proceeds from a settlement last month with Dish Network Corp (DISH.O) that ended a four-year dispute over programming.
AMC and Dish have in the past month resolved two disputes over the AMC channels that Dish carries and the fees charged.
AMC's results were very strong, especially considering Dish did not carry the network's channels during the quarter because of the fees dispute, said Lance Vitanza of CRT Capital Group.
"These guys will continue to do very well in 2013. The expectation should be for better performance in 2013 than we'd been expecting .... and that's why the stock is up," he said.
Dish, which resumed broadcasting the channels last week, accounts for about 13 percent of AMC's distribution, Vitanza said.
AMC, whose channels also include IFC, WE tv, HDNet Movies and Style, said the blackout on Dish hit revenue but this was offset by strong and consistent demand for advertising on shows such as "Walking Dead" and "Mad Men".
"The most notable thing has been the interest on behalf of advertisers in being in these particular shows," Chief Executive Josh Sapan said on a conference call.
The October premiere episode of the third season of "Walking Dead", a series set in a world dominated by flesh-eating "walkers", was the most watched drama in cable history ever, he said.
AMC says the latest season of "Walking Dead" has outperformed hits from broadcast competitors such as ABC's (DIS.N) "Modern Family" and CBS's (CBS.N) "The Big Bang Theory".
AMC earned $36.6 million, or 51 cents per share, on revenue of $332 million in the third quarter, well above analysts' estimated 37 cents per share on revenue of $288.5 million, according to Thomson Reuters I/B/E/S.
A year earlier, the company had net income of $40 million, or 55 cents per share, on revenue of $284 million.
Affiliate and other revenue rose by 24 percent to $199 million in the third quarter, while advertising revenue was up 9 percent at $107 million.
The now resolved four-year old programming dispute with Dish and the associated litigation costs hurt operating cash flow by 11 percent during the quarter, AMC said.
AMC shares were up 10 percent at $53.37 at midday on the Nasdaq.
(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Sreejiraj Eluvangal)
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