AMC Networks’ profits surged 21% in the second quarter of 2019 despite an 11% dip in American ad sale revenues from its national cable networks.
The New York-headquartered broadcaster, led by president and CEO Josh Sapan, saw its net income for the quarter rise US$129 million, $2.25 per share, compared to $106 million, or $1.82 a share, in the year-ago period.
Second quarter net revenues enjoyed a 1.4% uptick of $11 million to $772 million, which the company attributed to the 22.4% increase in revenues at its international operations. However, domestic revenues at AMC’s national cable networks – AMC, We TV, SundanceTV and BBC America – experienced a 3.6% decrease.
AMC Networks was also hit with an 11.1% ($21 million) loss in operating income, which came in at $170 million. The decrease in operating income, the broadcaster said, reflected an increase of 2% at its national networks, offset by an increase of $16 million in operating loss at its companies overseas.
The increase in operating loss at its international outfits, meanwhile, was primarily related to $17.2 million ($9.7 million in Q2 2018) in restructuring of the company’s direct-to-consumer businesses and related charges incurred in the July 2018 acquisition of Robert Johnson’s Silver Spring, Maryland-based RLJ Entertainment. Adjusted operating income dipped slightly at 0.6% to $232 million due to higher operating expenses connected to the RLJ deal.
RLJ Entertainment serves as a content distribution company that also includes the subscription streaming services Acorn TV and Urban Movie Channel.
Adjusted earnings per share grew 34.7% from the $1.93 AMC Networks reported in Q2 2018.
“We delivered solid results in the second quarter and remain on track to deliver on our financial targets for the full year,” said Sapan in a statement. “We continue to make significant progress on our strategic goals, which include creating great content and diversifying our revenue.
“In addition, we are seeing very healthy rates of growth across our four targeted SVOD services – Acorn TV, Shudder, Sundance Now, and UMC,” the executive continued. “As these services gain sufficient scale, we have been increasingly populating them with original content, which has been resonating with subscribers and is driving our momentum. As we continue to remain focused on creating sought-after premium content – which propels our entire enterprise – we believe direct-to-consumer, along with owning more of our intellectual property and expanding our studio, represent significant growth areas for us.”