AMC Networks delivered a solid gain in total subscribers in 2017, thanks in part to the wave of digital MVPD services that launched last year. But the company’s fourth quarter results demonstrated softness at its U.S. networks as they battled a decline in revenue, higher operating costs and a $38 million write-off of programming assets including the now-canceled AMC series “Hell on Wheels.”
“AMC Networks delivered record financial results in 2017, increasing net revenues and adjusted operating income for the seventh consecutive year since becoming a public company, and generating significant free cash flow that we are using to invest in key strategic initiatives and our networks,” said AMC Networks president-CEO Josh Sapan.
Revenue for the fourth quarter was down 1.3% to $606 million, compared to the year-ago quarter, for the national networks unit, which encompasses AMC’s five U.S. networks — AMC, SundanceTV, IFC, We TV and BBC America — and its AMC Studios production arm, home of “The Walking Dead.” Operating income fell 5.2% to $195 million. AMC recorded a $38 million write-off in programming assets for the quarter — a number largely driven by AMC drama series “Hell on Wheels,” which wrapped its run in the summer of 2016.
For the full year, total subscribers to AMC Networks grew 3%, or a total of 11 million. Some of that increase came from expanded carriage deals on traditional linear MVPDs for AMC Networks’ smaller channels a la IFC and We TV. In tandem with earnings, AMC Networks announced a distribution deal with year another OTT service, Fubo TV, for its five anchor networks. Fubo will also distribute the AMC Premiere service that offers an advertising-free version of the flagship AMC network for a $5 monthly fee.
For AMC Networks overall, Q4 revenue slipped 0.4%, or $3 million, to $727 million. Operating income was up 56% to $162 million thanks to a much narrowed loss at AMC Networks International and Other unit. Last year, the international arm incurred a $68 million charge in connection with a digital media venture that was sold in July 2017. Adjusted operating income was down 3.4% to $206 million.
For the full year, AMC Networks’ net revenue grew 1.8% to $2.8 billion. Adjusted operating income perked up 3% to $905 million.The federal tax reform bill also helped boost AMC’s earnings per share to $1.68, compared to $1.30 in the year-ago quarter.
(Pictured: “The Walking Dead”)