Earnings per share came in at $1.22, or $1.47 when adjusted for the impact of foreign currency conversions, but either figure was well short of analysts’ consensus forecast of $1.86. In the same period a year ago, earnings were $2.64 a share.
Revenue at AMC, which operates cable networks AMC, IFC and BBC America and controls franchises like The Walking Dead, totaled $734 million. That figure fell 6% from a year ago and shy of the consensus for $738.9 million. The drop in ad revenue was due to “lower delivery as well as the timing of the airing of original programming partially offset by higher pricing,” the company said.
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Distribution revenue, the other key element of the traditional cable business model, fell 6% to $354 million.
The first quarter ended March 31, weeks after the coronavirus had begun to do major damage to the media business, freezing production and softening the ad business. AMC Networks emphasized it is in a secure financial position as it navigates an operating environment it called “unique.”
In the earnings release, the company highlighted its financial position in the pandemic, saying it was secure. said it had free cash flow in the quarter of $182 million, up $38 million from the year-earlier quarter. In addition, it said it has access to $704 million of cash and cash equivalents as well as a $500 million revolving credit facility, which it has yet to tap.
Streaming proved a silver lining in the quarter. The company projected it will reach 3.5 million to 4 million subscribers to its portfolio, including Acorn, Shudder, Sundance Now and Urban Movie Channel, by the end of 2020. That is two years earlier than previous forecasts. Unlike rival media companies ramping up general-interest offerings, AMC has pursued a niche strategy, targeting highly differentiated audiences with a largely subscription-based approach.
“Our continued investment in key areas – creating strong content and valuable IP; growing our targeted SVOD services; and maximizing the value of our linear channels – is enabling us to navigate this challenging time and will continue to serve us well when this environment stabilizes and as we look beyond this immediate period to the remainder of 2020 and ahead to 2021,” CEO Josh Sapan said in the earnings release.
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