Low ratings for shows including Fear The Walking Dead helped to undermine AMC Networks’ just-released Q3 financials, which fell short of most analysts’ expectations.
Company shares are down 2.8% in pre-market trading.
The programming company generated $65.4 million in net income, down 10.1% vs the period last year, on revenues of $634.6 million, up 0.4%. The top line missed Wall Street’s forecast for $660.6 million.
And earnings at 91 cents a share were well below the $1.02 that analysts anticipated.
“We continued to execute on our long-term strategic goals during the third quarter,” CEO Josh Sapan says. He says the company remains “on track to deliver solid results for full year 2016.”
In addition, he says, AMC is being picked up by “emerging streaming TV offerings, most recently joining the new DirecTV Now service, in addition to Sling TV and Sony’s PlayStation VUE.” That “provides us with substantial economic benefits and positions us well for long-term success and growth.”
Operating income at the National Networks fell 19.6% to $139.1 million, with revenues up 0.8% to $525.7 million. Income from pay TV distributions increased 8.0% due in part to AMC’s price increases.
But ad sales dropped 9.9% which the company says “primarily reflected declines at AMC principally related to lower ratings.”
Meanwhile the company shouldered higher programming costs, as well as a $19 million write-down for unspecified shows and “an increase in restructuring expense.” AMC had a $12 million write-down in last year’s Q3.
At the International and Other segment — which includes IFC Films — the operating loss increased 50.3% to $16.7 million with revenues mostly flat at $114.0 million. The film operation was the culprit: AMC says that revenues were up at AMC Networks Intrnational, but down at IFC Films.
The period also included an increase in restructuring expenses.
AMC shares are down nearly 34% this year as investors question whether the company can develop a show popular enough to sustain the success it saw with The Walking Dead.