AMC Networks reported higher fourth quarter earnings as advertising and distribution revenue rose.
But higher than expected increase in expenses--including programming costs--hurt cash flow at the company's domestic networks and sent AMC's stock price down 7% in mid-day trading.
Fourth quarter income increased to $90.1 million, or $1.23 a share, from $77.6 million, or $1.06 a share, a year ago.
Revenues rose 11.4% to $679 million.
The results topped Wall Street estimates.
“Our strategy of creating compelling original, high-quality programming continues to deliver strong financial results, including double digit increases in revenue and adjusted operating cash flow,” said CEO Josh Sapan.
“We continued to build and expand our international business into key markets across Europe and Latin America,” Sapan added.
Cash flow was down 1% to $188.6 million at AMC’s national networks, which include AMC, IFC, SundanceTV and WE tv. Operating expenses were up, including programming and marketing costs. The company took a charge of $16 million writing off some programming assets. The acquisition of BBC America also contributed to the increase in operating expenses, the company said.
Revenues were up 12.5% to $562.3 million. Ad revenues were up 13.4% to $289 million. Distribution revenues were up 11.6% to $273 million.
"The good news is, the programming they have is working to their satisfaction. The bad news is, it's expensive," said Sanford C. Bernstein analyst Todd Juenger in a research note
Cash flow for international operations rose to $8.7 million from $3 million a year ago. Revenues rose 8.1% to $119.2 million from $110.3 million.