AMC Networks stock surges after profit more than doubles expectations

Shares of AMC Networks Inc. (AMCX) surged 7.3% towards a 3 1/2-month high in premarket trading on Friday, after the TV network and streaming services company reported a fourth-quarter profit that was well more than double what was expected. The company reported a net loss of $264.7 million, or $6.11 a share, compared to net income of $17.0 million, or 39 cents a share, in the year-ago period. Excluding nonrecurring items, such as $423 million in costs related to a restructuring plan commenced in November, adjusted earnings per share jumped to $2.52 from 54 cents, to more than double the FactSet EPS consensus of $1.02.

Revenue for the quarter grew 20.0% to $964.5 million, above the FactSet consensus of $934.0 million. Domestic revenue surged 25.7% to $861.1 million, beating the FactSet consensus of $824.0 million, while international revenue fell 11.7% to $107.6 million to miss expectations of $108.1 million. Streaming revenue rose 41%, as subscribers reached 11.8 million at the end of the quarter.

The stock, which is on track to open at the highest price seen during regular-session hours since November 1, 2022, has slipped 1.3% over the past three months through Thursday, while the S&P 500 (SPX) has gained 3.6%.

The impressive fourth-quarter results are a reflection of AMC Networks’ strategy of focusing on its domestic and streaming businesses. The company has made several acquisitions in the streaming space in recent times, such as the acquisition of RLJ Entertainment in 2019 and the acquisition of Acorn TV and UMC in 2020. These acquisitions have allowed AMC Networks to expand its streaming portfolio and reach a wider audience.

The company has also invested heavily in original content, including the critically-acclaimed shows Killing Eve and The Walking Dead. This has enabled AMC Networks to increase its viewership and attract more subscribers to its streaming services. Additionally, the company has also launched several international channels, such as AMC Asia, AMC France, and AMC Italy, in order to expand its reach in international markets.

In addition to its acquisitions and investments in original content, AMC Networks has also implemented cost-saving measures to reduce its expenses. The company has reduced its workforce and restructured its operations, which has resulted in savings of approximately $50 million in 2020.

The impressive fourth-quarter results and the company’s focus on its domestic and streaming businesses have resulted in strong investor sentiment. The stock is on track to open at the highest price seen during regular-session hours since November 1, 2022. Going forward, investors will be closely watching the company’s progress in its domestic and streaming businesses, as well as its cost-saving measures, to determine whether the stock can continue to perform well.


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