* Q2 earnings from continuing operations $0.57/shr vs est
* Second-quarter revenue up 12 pct to $328 mln vs est $324.5
* AMC said lost 13 pct of subscribers on termination of Dish
* Shares trading flat
By Chandni Doulatramani
Aug 8 AMC Networks Inc said a prolonged
blackout of its channels by Dish Network Corp will
materially impact revenue in the coming quarters.
The company said termination of its contract by Dish, the
second-largest U.S. satellite TV provider behind DirectTV
, reduced its subscribers by about 13 percent in the
A dispute over programming fees prompted Dish to drop AMC's
channels, home to popular shows such as "Walking Dead" and "Mad
Men," from July 1 after its contract with the company expired
without a new agreement.
"The termination of Dish Network's carriage will have a
material impact on our revenue, adjusted operating cash flow and
operating income in future periods," the company said in a
The company's shares have gained 25 percent since the
blackout as investors think Dish is likely to come back to the
"Dish is going to try and punish AMC by cutting off
subscribers in order to gain leverage in its negotiation. So I
think investors are thinking that subscriber loss is a
negotiating tactic," Gabelli & Co analyst Brett Harriss said.
As AMC - formerly known as American Movie Classics - has
evolved from a backwater cable channel for old movies to a
provider of premium TV shows, cable and satellite operators have
braced themselves for higher subscriber fees.
AMC, whose channels include AMC, IFC, WE tv, HDNet Movies
and Style, said Dish has not discussed programming fee rates
with the company at all.
The impact on the company's results will depend on how long
it is off Dish's platform, and if and when the two companies
reach a new carriage agreement, AMC CEO Josh Sapan said on a
"I think there is a very good chance that there will be a
settlement ... I can certainly see a settlement for half a
billion dollars," CRT Capital Group analyst Lance Vitanza said
Sapan said Dish dropped its networks to gain leverage in an
AMC, along with its former parent Cablevision, had
sued Dish for $2.5 billion, claiming improper termination of a
15-year contract. The suit alleged that DISH improperly
terminated the contract with VOOM HD, an indirect unit of AMC.
The trial is scheduled to begin on September 18. The company
expects the trial to last anywhere from four to six weeks.
Dish Chairman Charlie Ergen on Wednesday said customers
missing AMC programs should turn to Apple's iTunes or
Netflix to get their "Mad Men" and "Breaking Bad" fix.
Dish, which reported lower-than-expected results on
Wednesday, said it would lose some subscribers in the third
quarter because of the dispute.
AMC's second quarter ended on June 30, just before the Dish
Net income from continuing operations rose to $41.4 million,
or 57 cents per share, in the second quarter, from $27.1
million, or 39 cents per share, a year earlier.
Revenue rose 12 percent to $328 million.
Sales from advertising rose 13.4 percent to $130 million.
In 2011, advertising sales brought in 38 percent of its net
Analysts had expected earnings of 57 cents per share, on
revenue of 324.5 million, according to Thomson Reuters I/B/E/S.
Shares of AMC were trading flat at $43.31 on the Nasdaq,
while Dish shares were down about 1 percent at $30.38 in
afternoon trade on Thursday.