Shares down sharply in early trading
AMC Networks saw a cash infusion from Dish and a zombie-fueled jump in ad revenue last quarter, but profit fell on a $10 million loss related to a loan repayment.Net income dropped to $15 million from $29 million as the network behind “The Walking Dead” and “Mad Men” cited costs related to the repayment of its Term B loan facility. Shares fell sharply in early trading but ended the session down 3.56% to $56.00. AMC may have spooked investors by noting its calculation that a carriage deal it ultimately worked out with Dish was $31 million below fair value from when it started (in October) through December of this year, although it would increase to fair value after that. Revenue rose 8.2% to $367 million, led by 10.8% growth at national networks that offset a dip at international and other businesses. Advertising revenue surged 16% to $157 million; distribution fees grew 6.8% to $182 million. Lower revenue at IFC Films and Broadcasting & Technology pushed international/other revenue down by 17%. Litigation costs with Dish over Voom, also grouped in the “other” segment, squeezed profits there. AMC said free cash flow of $551 million for full-year 2012 included $350 million from a preliminary disbursement by Dish Network. Last fall, the satcaster settled a long-standing legal battle with AMC Networks and its former parent Cablevision, and the victors split an initial $700 million pot. AMC cautioned the division of the proceeds hadn’t been finalized yet, and the company could end up with less. The Dish litigation, over a series of high-definition channels Dish agreed to carry under a long-term contract but dropped after two years, overshadowed 2012 in legal fees, lost revenue in the third and fourth quarters when AMC channels were pulled from Dish, and the cash from settling. Meanwhile, AMC worked to ramp up scripted and non-scripted programming, and inked a number of other distribution deals with Verizon, AT&T and Comcast. Among other series, CEO Josh Sapan said he’s pleased “The Killing” is returning to AMC for a third season, after all. “We were able to work with Fox to get to a place where it made sense,” he said. “We sort of moved pieces around and made it work.” The network and its studio partner had called it quits before announcing in January the show would return.
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