What happened
According to data provided by S&P Global Market Intelligence, shares of AMC Networks(NASDAQ: AMCX) soared 51% over the past week after the entertainment company delivered adjusted profits that far surpassed Wall Street's estimates.
So what
AMC's net revenue jumped 20% year over year to $965 million in the fourth quarter. Strong growth in licensing revenue and streaming gains more than offset declines in traditional cable subscribers and advertising sales. AMC's content licensing revenue surged 152% to $300 million, driven in part by the delivery of episodes of the company's popular The Walking Dead franchise and related series.
Additionally, AMC's streaming revenue leaped 41%, boosted by the blockbuster debuts of Anne Rice's Interview With the Vampire and Mayfair Witches. AMC ended the fourth quarter with 11.8 million streaming subscribers, up from 11.1 million in the third quarter and roughly 9 million at the end of 2021.
All told, AMC's adjusted operating income -- which excludes restructuring and other related charges -- climbed 34% to $137 million. Meanwhile, the company's adjusted earnings per share came in at $2.52 -- more than double what analysts had projected.
Better still, AMC also improved its cash generation. Its operating and free cash flow increased 46% to $145 million and 77% to $128 million, respectively.
Now what
AMC is navigating the transition from traditional cable bundles to streaming services well -- so much so that it wouldn't be surprising if a larger streaming provider eventually makes a bid to acquire it. AMC has something all streaming companies want: popular, high-quality content.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
