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AMC Networks Earnings: The Dead Are Still Walking

By Anders Bylund – Updated Apr 10, 2019 at 2:13PM

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Expect more shows in the "Walking Dead" universe as the cable content veteran develops new ideas around that cash machine.

Cable network manager and content producer AMC Networks (AMCX -3.36%) released fourth-quarter results on Thursday, Feb. 28. The company expanded its top-line sales thanks to recent acquisition deals and its adjusted earnings increased by 14%, but the year-ago period's unique tax benefit made for some tough year-over-year comparisons on the unadjusted bottom line.

AMC Networks' fourth-quarter results: The raw numbers


Q4 2018

Q4 2017

Year-Over-Year Change


$773 million

$727 million


Net Income Attributable to Shareholders

$72 million

$145 million


GAAP Earnings per share (diluted)




Data source: AMC Networks.

What happened with AMC Networks this quarter?

  • AMC's national networks division saw sales falling 2.2% year over year, landing at $593 million. Operating income for this segment rose 0.6% to $178 million. Advertising sales increased while content distribution fees fell, and a cost-cutting effort delivered higher profits in spite of lower revenues.
  • In the international segment, sales rose 49% to $188 million and operating losses nearly doubled to $48 million. A couple of recently completed content production studio buyouts contributed to both the dramatically higher sales and the deeper operating losses, all alongside a mildly unfavorable currency-translation effect.
  • AMC Networks recorded a unique tax benefit of $56.9 million in the year-ago quarter to reflect the impact of the Trump administration's corporate tax reform in that quarter. Backing out this non-cash tax effect and other one-time line items such as restructuring costs, adjusted earnings rose 14% to $1.92 per share.
Panorama of a burning city with a handful of zombies shambling toward the flames.

Image source: Getty Images.

What management had to say

In a conference call with financial analysts, CEO Josh Sapan celebrated the ninth year in a row in which his network's The Walking Dead topped the annual cable TV audience rankings. The zombie show's ratings increased after the mid-season break, which Sapan saw as a unique display of strength for such a mature series. The company plans to capitalize on The Walking Dead's eyeball-magnet powers by expanding that fictional world in several new directions.

"In the year ahead, we'll be moving forward with the expansion of the Walking Dead universe, which we believe is some of today's most valuable intellectual property on any screen anywhere," Sapan said. "Our next-stage plans around it are beginning to take shape, and we're pleased to say that we've been nearly overwhelmed with interest from potential partners, which would give us a more substantial economic platform for launching the next iterations of this franchise, which includes the third show currently in development under the direction of our Walking Dead creative czar, Scott Gimple."

AMC Networks is actively drawing up development plans for that third series in the Walking Dead universe, expanding beyond the eponymous series and Fear the Walking Dead in the near future. That being said, don't expect a premiere of the new show in 2019. COO Ed Carroll put it this way:

We're not yet at a stage where we'll be announcing its plans to premiere. We have hired creative people that have pitched story outlines. We feel great good about the development of that series. We are not in a position to talk about partnerships in terms of other territories or ancillary windows other than, as Josh mentioned, there's a healthy appetite for it and we've had discussions with a number of different players in the space.

Check out the latest earnings call transcript for AMC.

Looking ahead

The company is not in the habit of providing firm financial targets for the next quarter or the next fiscal year, but management did offer some forward-looking guidelines in broad strokes.

AMC Networks' business-to-consumer services are coming on strong and should produce significant revenues in 2019 and beyond. Management expects these services to become "an increasingly meaningful component of our business" over the next few years.

Total revenue should grow in the "mid to single digits," percentage-wise, in the new fiscal year. This growth will stem from the company's maturing streaming services as well as steady improvements in the core cable TV business, despite a one-year hiatus in new content for popular shows Doctor Who and Better Call Saul because of quirks in their long-term production cycles.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool recommends AMC Networks. The Motley Fool has a disclosure policy.

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