AMC Networks Takes $97M Impairment Hit In Q2, Reaffirms Strong Free Cash Flow Outlook

AMC Networks Inc AMCX reported a fiscal second-quarter 2024 revenue decline of 7.8% year over year to $625.9 million, beating the analyst consensus estimate of $601.3 million.

The American entertainment company’s adjusted EPS of $1.24 fell 38.6% year over year and missed the analyst consensus estimate of $1.52. 

Domestic Operations: Affiliate revenue decreased 12% to $172 million due to basic subscriber declines. Advertising revenues decreased 11% Y/Y to $149 million due to anticipated linear ratings declines and a challenging ad market. 

Content licensing revenues declined 18% to $67 million due to the availability of deliveries in the period.

Despite these setbacks, AMC Networks reported that streaming subscribers increased by 5% to 11.6 million compared to 11.0 million subscribers as of June 30, 2023.

Streaming revenues of $150 million increased 9%, primarily driven by year-over-year streaming subscriber growth and price increases.

The consolidated adjusted operating income decreased 13.6% to $152.8 million, with free cash flow at $95.2 million.

AMC Networks booked impairment and other charges of $97 million for the quarter, which primarily consisted of a $68 million goodwill impairment charge at AMC Networks International U.K. and $29 million of long-lived asset impairment charges at BBC America.

CEO Kristin Dolan said: “Key to our plan is the creation and curation of celebrated films and series, and making them available to audiences everywhere, including through an exciting new branded content licensing agreement with Netflix. In the first half of 2024, we’ve made significant progress against our strategic priority of generating strong free cash flow, and we’re well on our way to achieving our free cash flow guidance for the full year.”

AMC Networks lost 20% in the last 12 months.

Price Action: AMCX shares were trading lower by 2.82% to $10.01 premarket at the last check on Friday.