What Happened: Shares of television broadcasting and production company AMC Networks (NASDAQ:AMCX) fell 20.7% in the afternoon session after the company reported fourth-quarter results with operating income and EPS falling below Wall Street's expectations. On the other hand, revenue beat by a small margin, though it continued to decline in the absolute term, falling by 29.6% year on year. The decline was mostly driven by the domestic operations business, which fell 32% year on year. International revenue also fell 9% yearly, showing broad-based topline weakness.
A bright spot was that free cash flow came in better than expected. From a product perspective, the company pointed out that AMC+ (the streaming platform) launched "an ad-supported tier in the third quarter, with strong new sign-up activity on available platforms since launch."
Overall, this was a weak quarter for the company, which continued to endure industry-level headwinds given the growing shift from traditional TV to streaming services.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy AMC Networks? Find out by reading the original article on StockStory.
What is the market telling us: AMC Networks's shares are quite volatile and over the last year have had 46 moves greater than 5%. But moves this big are very rare even for AMC Networks and that is indicating to us that this news had a significant impact on the market's perception of the business.
AMC Networks is down 25.3% since the beginning of the year, and at $14.41 per share it is trading 46.9% below its 52-week high of $27.13 from February 2023. Investors who bought $1,000 worth of AMC Networks's shares 5 years ago would now be looking at an investment worth $232.48.
