AMC Networks reported lower earnings in the second quarter as the COVID-19 pandemic hurt advertising and distribution revenue.
Net income dropped to $15 million, or 28 cents a share, in the second quarter, from $129 million, or $2.25 per share a year ago.
Revenue dropped 16% to $646 million.
“Amidst a continuing challenged and uncertain environment, AMC Networks delivered solid results in the 2nd quarter exceeding our financial expectations for the quarter and expectations on several key metrics, including advertising,” said CEO Josh Sapan. “We have made particular progress during this COVID period with strong growth across our targeted SVOD services – Acorn TV, Shudder, Sundance Now and UMC – as consumers increasingly subscribe to both our targeted offerings in addition to general entertainment SVOD services.”
Adjusted operating income at AMC’s national networks fell 11.2% to $209.9 million. National network revenue was down 18% Ad revenue was down 14.6% to $187 million. The company blamed the impact of the COVID-19 pandemic and the timing of original programming.
Ad revenue was hurt by a delay in airing the season 10 finale of The Walking Dead, and putting off the launch of the third Walking Dead series, The World Beyond.
During the company’s earnings call, Sapan said that the Walking Dead finale will air Oct. 4, along with the debut of World Beyond. Season six of Fear the Walking Dead is also set to air.
“This is a franchise that is expanding and thriving,” Sapan said of the company’s Walking Dead Business. He said the company was in control of where and when shows will air for maximum effect.
Distribution revenue was down 19.9% to $308 million as subscription revenue and content revenue fell.
AMC CFO Sean Sullivan said the company expected third-quarter ad revenue to be down in the mid to high teens, in part because of a delay in airing season six of Fear the Walking Dead.
Third-quarter distribution revenue is expected to be “consistent” with second quarter, Sullivan said, both in terms of subscriber revenues and content licensing.