AMC Networks followed the discouraging pattern of media and tech companies reporting advertising downturns in the third quarter.
The parent company of cable networks like AMC and IFC and streaming services like Acorn TV and Shudder posted earnings per share of $1.94, down 24% from the year-ago quarter. Revenue slumped 16% to $682 million due to the advertising slide, lower affiliate revenue and unfavorable foreign currency exchange rates.
The revenue line was below Wall Street analyst’s consensus forecasts, but the profit figure came in ahead of expectations.
Advertising fell 10% year-over-year to $180 million due to lower linear ratings, softer scatter and direct response markets and fewer original hours in the third quarter, the company said.
In the past couple of weeks, only Fox Corp. has managed to deliver a more encouraging quarterly report on the advertising front, mostly because of a surge in political ad spending during the midterm election cycle. Advertisers have pulled back in many areas as they contend with a worsening global economy, inflationary pressures and a host of other big-picture factors. Even YouTube, as reliable an engine of ad-sales growth as there has been in the media business of late, reported its first quarterly dip in ad revenue.
AMC Networks’ streaming subscriber levels grew 44% from the prior year to 11.1 million, helping the streaming business post a 41% jump in revenue. The company has projected reaching 20 million to 25 million subscribers by 2025 and says most of its total revenue will come from streaming by then, given rates of cord-cutting and streaming adoption.
“Our focus to transform to a consumer-focused multi-platform premium content company is taking hold with strong digital distribution growth,” CEO Christina Spade said in the earnings release.