What happened
Shares of AMC Networks (AMCX -1.48%) were moving higher last night after the company posted a better-than-expected fourth-quarter earnings report, and new management took over.
According to data from S&P Global Market Intelligence, the stock gained 21% last month. As you can see from the chart below, AMC spiked on earnings before giving up some of those gains over the duration of the month.
So what
AMC's gains came primarily on Feb. 17 when the stock jumped 32.3% after its fourth-quarter earnings report came out and it beat estimates on the top and bottom lines.
Revenue jumped 20% to $964.5 million, ahead of estimates at $947.8 million, driven by strong growth in distribution revenue due to the timing and availability of deliveries in the period, including early deliveries of The Walking Dead and Fear of the Walking Dead. Content licensing revenue increased 152% to $300 million, making up most of the increase in the top line.
It also posted a 41% increase in streaming revenue, finishing the quarter with 11.8 million streaming subscribers. Adjusted earnings per share jumped from $0.54 to $2.52, well ahead of the analyst consensus at $1.20.
Executive Chairman 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."
AMC also named Dolan's wife and longtime board member, Kristin Dolan, as its next CEO, effective Feb. 27. Dolan had previously founded and served as CEO of 605, an audience measurement and data analytics firm.
AMC's prior CEO, Christina Spade, left the company last November after just three months at the helm, showing it has faced challenges in its leadership ranks.
Now what
Like other legacy media companies, AMC is struggling with the transition to streaming, but the recent results offer some encouragement to investors. The company reported free cash flow of $102.6 million for the full year and has an enviable library of content, including The Walking Dead and new titles from its Anne Rice Universe such as Anne Rice's Interview.
While revenue through cable subscriptions is shrinking, the company has a growing streaming business as well as a valuable revenue stream producing content for other media outlets.
Keep your eye on streaming growth and content licensing revenue. If those continue to ramp up, the stock could be well positioned for a recovery.
