AMC Networks’ fourth-quarter net income fell to $14 million, compared with $90 million in the year-ago quarter.
While the programmer’s net revenues rose 7.5% to $730 million, thanks to 9.2% growth at national networks offsetting a $1 million decrease at international and other, operating income fell 35.3% to $104 million. The operating income slide was due in part to AMC’s international segment—which houses AMC Networks International and IFC Films—posting an $88 million operating loss as well as a $68 million impairment charge.
AMC’s Amsterdam-based Digital Media Center caused the impairment charge after management revised its outlook for the growth potential of the AMCNI-DMC.
Meanwhile, AMC’s national networks segment—which houses AMC, WE tv, BBC AMERICA, IFC and SundanceTV, as well as AMC Studios—saw its operating income increase 9.2% to $189 million off of fourth-quarter revenues that rose 9.2% to $614 million. Broken down, the segment saw a 15.6% increase in distribution revenues and a 3.1% increase in advertising revenues thanks to higher pricing but partially offset by lower delivery.
Jefferies analyst John Janedis said AMC’s ad growth for the quarter and the year exceeded expectations.
“We expect that strength was driven by strong scatter and better than expected ratings performance in the final month of the quarter,” wrote Janedis in a research note.
For the full year at AMC overall, net revenues were up 6.8% to $2.75 billion but net income fell to $271 million, down from $367 million one year ago.
Despite the downward trends amid AMC’s fourth-quarter and full-year results, CEO Josh Sapan said his company will continue its disciplined and focused investment strategy.
“‘The Walking Dead' remains the #1 show on television by a wide margin and is a powerful example of programming that we own and distribute that commands a loyal audience, attracts advertising revenue, and has significant ancillary revenues that will benefit our business for years to come. With a rapidly expanding studio business, we now have a growing portfolio of shows that we own that provide this kind of opportunity for our business,” said Sapan in statement. “In addition, we are embracing changing viewing habits by making strategic investments in streaming services that fit well with our programming and the audiences at our network brands. As we look ahead in 2017, we see a number of attractive growth opportunities for our businesses and remain committed to delivering meaningful value to our shareholders."