What happened

Shares of AMC Networks (AMCX -35.14%), one of the last of the dinosaurs in legacy media, were surging today after the company posted strong results in its fourth-quarter earnings report.

As of 11:56 a.m. ET, the stock was up 26.8%.

A couple sitting on the couch watching TV.

Image source: Getty Images.

So what

AMC Networks, which owns cable channels like AMC, Sundance, IFC, and BBC America, in addition to the AMC+ streaming service, said revenue in the quarter rose 20% to $965 million, topping estimates at $947.8 million.

That performance was driven by a 45% jump in domestic distribution revenues to $655 million. Content licensing revenue surged 152% to $300 million due to the timing and availability of deliveries, including the early delivery of episodes of The Walking Dead and Fear the Walking Dead.

Streaming revenues rose 41% and finished the quarter with total subscribers of 11.8 million. That growth more than offset a 7.5% decline in affiliate revenues due to basic subscriber declines, and total subscription revenue rose 7%.

Ad revenues also fell 12% to $206 million amid a weaker cable ecosystem and ad market softness. 

Excluding restructuring and other one-time charges, adjusted operating income rose 27% to $154 million, benefiting from lower marketing spending. On the bottom line, its adjusted earnings per share jumped from $0.54 to $2.52, well ahead of the consensus at $1.20.

Interim CEO James Dolan said: "AMC Networks is focused on maximizing the value of our high-quality, popular content through optimized content monetization as we reduce costs and drive cash flow. We believe this approach will position the company well to navigate current industry dynamics and enable us to generate long-term shareholder value."

Earlier this week, the company also named Dolan's wife and longtime board member, Kristin Dolan, as full-time CEO, starting Feb. 27.

Now what

AMC didn't offer guidance in the earnings report, but investors should expect volatility to continue in both the stock price and the business performance, as the company has now been through several rounds of restructuring as it seeks to find the right strategy in the current media environment.

Its cable-based businesses are likely to see further declines, but licensing could continue to be a lucrative revenue stream for the company, and the growth in streaming is encouraging.

The entertainment stock looks cheap based on conventional metrics, but there's still a lot of risk here, given the upheaval in the industry.