NEW YORK - In a strategic move to bolster its content offerings, Charter Communications , Inc. (NASDAQ: NASDAQ:CHTR) and AMC Networks (NASDAQ: NASDAQ:AMCX) have renewed their distribution agreement. This multi-year deal not only ensures the continued availability of AMC Networks' linear channels for Charter's Spectrum customers but also enriches the Spectrum TV Select package by including the ad-supported AMC+ streaming service without additional cost.
The partnership between the two companies aims to provide added value to Spectrum subscribers by integrating premium streaming content into traditional cable packages. Spectrum TV Select customers will now have access to AMC+, which offers a collection of originals, award-winning series, and exclusive movies. Additionally, Charter will offer AMC+ as a standalone purchase for its internet-only customers, expanding the service's reach.
Tom Montemagno, Charter's Executive Vice President of Programming Acquisition, highlighted the agreement's role in enhancing the variety of premium content available to customers. The addition of AMC+ complements a series of recent expansions to Spectrum's content portfolio, which this year included Paramount+ Essential, ViX Premium with Ads, Disney+, and ESPN+.
AMC Networks' cable portfolio, which features popular series such as "The Walking Dead Universe" and "Gangs of London," will continue to be accessible to Spectrum video customers. AMC+ further provides same-day access to all new AMC series and full access to Shudder, Sundance Now, and IFC Films Unlimited.
Kim Kelleher, Chief Commercial Officer of AMC Networks, expressed satisfaction with the early renewal, emphasizing the shared commitment to viewers and the evolving ways they consume content. The financial terms of the agreement were not disclosed.
Charter Communications, serving over 57 million homes and businesses in 41 states, is known for its Spectrum brand that offers a full spectrum of broadband services. AMC Networks is recognized for its compelling series and films across various brands, including targeted streaming services AMC+, Acorn TV, Shudder, Sundance Now, ALLBLK, and HIDIVE.
This distribution agreement is based on a press release statement and signifies a continued partnership aimed at transforming the video industry by integrating streaming services with traditional cable offerings.
In other recent news, AMC Networks Inc. reported its second-quarter results, with revenue surpassing expectations but earnings falling short. The company posted a revenue of $625.9 million, beating analyst estimates of $601.4 million. On the other hand, adjusted earnings per share came in at $1.24, below the consensus forecast of $1.52.
Despite a 7.8% year-over-year decline in revenue, streaming revenue grew by 9% to $150 million, attributed to subscriber growth and price increases. The company ended the quarter with 11.6 million streaming subscribers, a 5% increase from the previous year.
AMC Networks' domestic operations saw a 36.8% decrease in operating income to $102.7 million, and the international segment reported an operating loss of $43.8 million. The company also recorded impairment charges of $96.8 million, including a $68 million goodwill impairment related to its international business.
In terms of future plans, AMC Networks reaffirmed its full-year free cash flow guidance, emphasizing its focus on targeted streaming services and content licensing deals in response to shifting viewer habits.
InvestingPro Insights
In light of the renewed distribution agreement between Charter Communications and AMC Networks, examining the financial health and market performance of AMC Networks (NASDAQ: AMCX) provides valuable context. According to InvestingPro data, AMC Networks has a market capitalization of $434.37 million and trades at a P/E ratio of 7.43, suggesting that the company's earnings are relatively inexpensive compared to its share price. This is further underscored by the company's adjusted P/E ratio for the last twelve months as of Q2 2024, which stands at an even lower 2.04.
The company's Price / Book ratio of 0.41 indicates that AMC Networks is trading below its book value, which could be a sign that the market undervalues the company's assets relative to its share price—an InvestingPro Tip to consider. Moreover, AMC Networks has experienced a revenue decline of 16.57% in the last twelve months as of Q2 2024, aligning with analysts' expectations of a sales decline in the current year. Despite this, the company remains profitable over the last twelve months, with a gross profit margin of 52.18%. This profitability is a key factor, as analysts predict that AMC Networks will maintain profitability this year.
However, investors should be aware of the significant price drop over the past three months, with the stock's total return decreasing by 45.31%. This market performance may reflect the broader challenges faced by the media industry or investor sentiment towards the company's future prospects. For those considering an investment in AMC Networks, the InvestingPro platform offers additional insights, including 7 more InvestingPro Tips for a comprehensive analysis. For detailed metrics and further tips, visit https://www.investing.com/pro/AMCX.
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