AMC Networks’ third-quarter earnings beat estimates; ad sales fall

AMC Networks Inc., home to “Mad Men” and “The Walking Dead,” reported third-quarter results that surpassed Wall Street projections in large part due to growth in overseas markets.

The New York-based cable networks scored a massive gain in international revenue after its $1-billion acquisition of Chellomedia in February. The deal gave AMC a portfolio of networks in Europe, Latin America, the Middle East and Asia.

That helped drive AMC profit during the July-to-September period. The company reported earnings of $53.2 million, or 74 cents a share, compared with $58.1 million, or 81 cents a share in the year-ago period. Despite the drop, the company still surpassed analysts’ projections of 73 cents a share.

Revenue also beat expectations, rising 31% to $520 million during the quarter. International revenue soared to $122.7 million, up 765% from the $14.2 million the company reported in the year-ago period.

Josh Sapan, AMC Networks’ president and chief executive officer, said one of the company’s biggest objectives is to expand outside of the U.S. The company took another big step internationally last month with its $200-million investment in BBC America, which will give it operating control of the channel.

“We think having BBC America aligned with [AMC’s cable networks] creates a collection of channels and shows that are stronger together,” Sapan said.

Though growth internationally was good, Sapan said advertising sales were weaker in the third quarter because the network’s hit show “Breaking Bad” aired its final season last year. National ad revenue dropped 5.8% from the year-ago period.

However, he projected that advertising would rebound in the fourth quarter because another AMC hit, “The Walking Dead,” has returned to TV screens. The show’s season premiere last month brought in a whopping 17.3 million viewers. Sapan described the zombie drama as “essentially our version of the NFL.”

Domestically, AMC’s channels, which also include Sundance, IFC, and WE tv, reported a 4.3% rise in revenue, to $397.4 million, during the third quarter.

The company, meanwhile, took a $9-million writedown after its decision to scrap a majority of its unscripted shows on AMC in order to refocus on its scripted output. The company hinted Thursday that a third night of original programming would come in 2015.

Twitter: @villarrealy