AMC 2Q earnings surge; Dish dispute may hurt 3Q
NEW YORK (AP) — AMC Networks Inc. on Thursday reported second-quarter earnings rose 53 percent, largely in line with analysts' estimates, but it predicted a big drag in the third quarter if its dispute with satellite TV company Dish Network Corp. continued to leave its channels off the service.
The company said that 13 percent of its subscriber base was affected by the blackout on Dish that has continued since July 1. It said that if the dispute continued, the negative impact on its operating income "will be materially higher."
Dish, which has 14 million subscribers, says the channels cost too much and that it would prefer to negotiate only for the flagship channel AMC, which is home to shows such as "Breaking Bad" and "The Walking Dead." Dish would prefer to do without lesser-watched channels WE tv, IFC and Sundance Channel.
AMC says Dish is trying to gain leverage in a lawsuit in which AMC is demanding Dish pay more than $2.5 billion in damages for cutting short a deal to carry AMC's Voom HD channels. The trial begins Sept. 18 in New York.
Benjamin Swinburne, an analyst with Morgan Stanley, said in a research note that the projected impact was "more than we had estimated." He had expected the Dish shutdown to affect just 8 percent of AMC subscribers.
There were about 96.9 million subscribers to AMC, the company's most widely distributed channel, at the end of June, the company said.
AMC shares were up 34 cents at $43.68 in afternoon trading after rising as high as $45.09 earlier in the session. AMC Networks shares peaked for the past year at $46.69 per share in mid-March.
The size of a potential legal settlement and whether AMC channels are restored to Dish are key swing factors in the stock.
Net income in the three months to June 30 rose to $41.5 million, or 58 cents per share, from $27.2 million, or 39 cents per share, a year ago.
Adjusted earnings from continuing operations came to 57 cents per share. Analysts surveyed by FactSet expected earnings of 58 cents per share.
Revenue rose 12 percent to $327.6 million from $292.0 million a year ago. That beat the $325.1 million expected by analysts.