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At AMC, It's All Breaking Good

Jon Friedman
August 19, 2013

AMC Networks (NASDAQ: AMCX) may well be the most widely admired cable-television network in the United States today because of the daring manner in which it is rewriting the rules about storytelling on the small screen.

Over time, television networks tend to trundle out the same "stuff" to their viewers, with predictable storylines about cops, lawyers, doctors, and spies. After a while, it all starts to sound the same to the audience watching at home, wishing for something imaginative.

Who else but AMC would dare to shake up the accepted blueprint for drama -- a likable hero giving us all at home a moving life lesson at the end of the hour -- by showing a series about mythical Madison Avenue fixture Don Draper (played by Jon Hamm) and other archetypal white-collar advertising men and women in the 1960s (Mad Men)? And what about a series like Breaking Bad, about Walter White (portrayed by Bryan Cranston, previously known for, among other things, acting as a quirky dentist named Tim Whatley on Seinfeld), a down-and-out high school chemistry instructor who is diagnosed with inoperable lung cancer (as the series launched). To take care of his family's finances, he turns to a life of crime by dealing crystal meth with one of his students.

The television critics understandably heap lavish praise on AMC for its boldness and ingenuity, but how is the lauded network faring these days on Wall Street?

Much of AMC's success in his gut-real environment depends on the success and durability of its new series Low Winter Sun as well as the fourth-quarter return of The Walking Dead, another of its extremely well received TV series.

Television is a notoriously unpredictable business because viewers' tastes can change so drastically from one episode to the next. If the folks at home don't like one episode, they may well turn the channel to a competitor and not come back. The entertainment industry can be brutal on the ego for the players.

Wall Street was pleased when AMC's second-quarter revenue figure of $379 million topped projections of roughly $367 million to $368 million. But its adjusted earnings per share of $0.74 failed to surpass the expectation of about $0.79. This was linked to the costs related to the introduction of the new programming.

Likely, AMC's future looks bright.

Walking Dead looks like as much of a sure thing as one can have in the topsy-turvy industry of television programming. Just ask The Fool's Tim Beyers, who wrote here on July