AMC Networks passed 2M subscribers for its four streaming services as digital growth and its international business helped full-year revenues grow, although lower advertising numbers hit the company’s fourth quarter financials.
Execs told Deadline last year that they expect to pass the milestone by the end of 2019 across the Acorn TV, Shudder, Sundance Now, and UMC (Urban Movie Channel) and they now have.
The company, which operates the eponymous network as well as BBC America, IFC, SundanceTV and WEtv, saw full year revenues in 2019 grow by 3%, up $88M to $3.06B. However, operating income was $625M, a decrease of 14.0%, or $102M, versus the prior year period. Full year net income was $380M, compared with $446M the previous year.
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AMC Networks’ earnings per share was $1.69 per share, falling below Wall Street estimates of $1.79 per share.
In the fourth quarter, the company recorded a $9M loss, compared to net income of $72M in the same quarter last year. Advertising revenues also decreased 7.8% to $251M.
Fourth quarter revenues reflected a 5.5% increase in distribution revenues to $338M. The increase in distribution revenues was attributable to an increase in content licensing revenues.
Fourth quarter operating income and adjusted operating income reflected the decrease in revenues as well as an increase in operating expenses. The increase in operating expenses was primarily attributable to higher programming expenses. Programming expenses included charges of $23M in the current year period related to the write-off of programming assets, as compared to charges of $29M in the prior year period. Operating income also reflected a decrease in restructuring and other related charges.
U.S. network revenues for the full year 2019 decreased 1.8% to $2.369B, operating income decreased 2.6% to $804M, and adjusted operating income decreased 2.4% to $904M, all compared to the prior year period.
Full year revenues reflected a 0.3% decrease in distribution revenues to $1.465B. The decrease in distribution revenues was attributable to a decrease in subscription revenues partially offset by an increase in content licensing revenues. Advertising revenues decreased 4.3% to $904M. The decrease in advertising revenues principally related to lower delivery partially offset by higher pricing.
International and other revenues, which include streaming, for the fourth quarter of 2019 increased 6.5% to $201M, operating loss increased $69M to a loss of $118M, and adjusted operating income increased 75.1% to $15M, all compared to the prior year period. Fourth quarter revenues primarily reflected an increase at AMC Networks’ SVOD services.
International and other revenues for the full year 2019 increased 22.7% to $734M, operating loss increased 82.2% to a loss of $170M, and adjusted operating income increased $31M to $50M, all compared to the prior year period.
The numbers come a day after it revealed that it had struck a comprehensive, long-term carriage deal with DISH Network and Sling TV, sending its stock up over 3%.
President and Chief Executive Officer Josh Sapan said, “AMC Networks achieved its key financial targets for the year, against a backdrop of a rapidly shifting media ecosystem. We continue to move our organization in a new strategic direction, from what has been a cable channels company into a premier targeted content company that is now inhabiting the traditional pay-TV ecosystem, the advanced advertising world, as well as the emerging targeted SVOD marketplace.”
“A new agreement with one of our biggest MVPD partners – DISH Network – includes the launch of our full suite of targeted SVOD services and demonstrates that our distribution partners are increasingly recognizing the value of our SVOD offerings. We are seeing momentum for our targeted SVOD services, which passed two million paid subscribers in the fourth quarter, as we continue to invest in strong, desirable content and valuable IP, diversify through new areas of content monetization and maximize the long-term value of our core networks and brands,” he added.
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