AMCX - AMC Networks leaps 25% after strong Q4 for revenues operating income

AMC Networks ( NASDAQ: AMCX ) has shot up 25% after easy beats in its fourth-quarter earnings where revenue came in somewhat stronger than expected and operating income jumped 34% year-over-year.

Revenues grew by 20%, and a gain in domestic operations (revenues up 26% there) more than made up for a 12% decline in International and Other net revenue.

On the company's midday earnings call (still ongoing), interim Executive Chairman James Dolan spoke to the hiring of his spouse as CEO and weighed in on the evolution of TV.

Kristin Dolan was named CEO after a "thorough search" by the board, James Dolan said, highlighting her 30-plus years in media and entertainment and a history of managing subscription-based businesses. Kristin has been on the "front lines of the evolution of advanced advertising and audience targeting," he said.

As for the content industry, it's seeing disruption from "cord cutting" and changes in viewership habits as well as a "challenged" ad market and rising content costs.

"As I've said in the past, the current mechanisms for monetizing content are not working. The content industry needs to reorganize itself," Dolan said.

"Streaming is a retail business. That's what DTC [direct-to-consumer] means," he said. "AMC Networks ( AMCX ) will focus on streamlining our organization, way more like retailers than wholesalers, driving cash flow and maintaining our strong balance sheet. At the same time, we will continue to do what we do best, which is making great content."

Chief Financial Officer Patrick O'Connell said the company was forecasting 2023 revenue of $2.9B, and streaming growth at a "moderated pace" vs. that of 2022, driven by lower gross additions. With a focus on monetization, the company is no longer providing streaming subscriber targets, he noted.

He also guided to 2023 adjusted operating income of $650M-$675M, and free cash flow (under a new definition) of $70M-$90M.

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