AMC Networks grew streaming subscribers by 44% in the third quarter, but saw revenue decline as advertising slumped by 10%, causing profit to fall sharply.
But adjusted earnings per share of $2.09 came in well ahead of the $1.77 per share forecast by Wall Street analysts.
Shares rose 4% to $21.69 premarket trading, despite AMC’s reported revenue of $681.8 million, a drop of 16% from last year’s third quarter, and falling short of the $786.78 million expected by analysts.
AMC said the revenue drop reflected several factors.
Advertising sales dropped to $180 million from $200 million in the year-ago quarter, due to lower rates, fewer original hours during the quarter. The timing of content licensing revenue also contributed. And international revenue slid 24% to $99 million, weighed down in part by the strong dollar impacting foreign exchange translation.
Those negatives were partially offset by streaming revenue growth of 41%.
Chief Executive Christina Spade said AMC reached 11.1 million paid subscribers in the quarter, propelled by several hits including “Anne Rice’s Interview With the Vampire,” which premiered in October. The company said it’s the “biggest new series in AMC+ history.” The gains also reflected expanded distribution, as AMC+ premiered in Australia, New Zealand and Spain.
“Our strong content engagement is driving positive momentum throughout 2022,” Spade said in prepared remarks. “Our focus to transform to a consumer-focused multi-platform premium content company is taking hold with strong digital distribution growth. Our ability to break through the competition with our highly-engaging content, as we further reconstitute our revenue mix, positions us well for long-term success and value creation.”
The company previously projected that it plans to have up to 25 million streaming subscribers by the end of 2025, more than double where It stands today. The cable network makes most of its money off of IFC, We TV and Sundance in addition to its flagship AMC brand.
In the “International and Other” segment, its production services business, revenue fell 24%. Distribution and “other” revenues were down 22%, while ad sales dropped 31%.