Shares of AMC Networks (AMCX 3.71%) rose as much as 27.2% on Friday morning, following a fantastic fourth-quarter earnings report. The cable TV content producer and distributor's stock had settled down at a 22% gain by noon EST.
AMC's fourth-quarter sales decreased 0.6% year over year, landing at $780 million. Analysts had expected top-line revenues of just $705 million. Adjusted earnings rose 61% to $2.72 per diluted share. Here, your average Wall Street firm would have settled for $0.52 per share.
The solid revenue reading reflected a 3% decrease in national networks sales and a 7% boost to international sales. The international segment also shrank its operating losses from $118 million to $77 million, more than making up for a $12 million decrease in AMC's domestic operating profits.
AMC Networks also recorded $81 million of miscellaneous operating income, up from $11 million in the year-ago quarter. These profits sprung from mark-to-market gains on the company's investments. Management did not clarify exactly what these investments were, and analysts didn't push the point on the earnings call. AMC Networks tends to release a full annual report the day after its fourth-quarter earnings announcements, where we might get some additional detail about the investment gains that sent AMC's bottom line to the moon.
AMC Networks tends to bundle its stock holdings and other long-term investments into an inscrutable line item known as "Other assets." That data point stood at $478 million at the end of the third quarter, including $40 million of investments in marketable equity securities. I can't wait to check up on those figures in the upcoming annual report. A big jump in the value of marketable securities could give us a big hint about the type of securities AMC Networks likes to buy.