"The Walking Dead" Animates AMC Networks Inc. Earnings

By Markets Fool.com

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Andrew Lincoln as Rick Grimes in season 5 of AMC's The Walking Dead. Credit: Frank Ockenfels 3/AMC.

Shares of AMC Networks rose about 5% Thursday as investors cheered better-than-expected fourth-quarter results from the upstart TV and movie studio.Here's a closer look at the final totals versus Wall Street's projections:

AMCX Revenue YOY Growth EPS YOY Growth
Consensus estimate $603.14 million 38.6% $1.01 90.6%
Q4 actuals $609.44 million 40% $1.15 116.9%
DIFFERENCE $6.3 million 1.4% $0.14 26.3%

Sources: S&P Capital IQand AMC Networks press release.

For the full year, AMC reported $2,175.64 million in revenue and $3.77 a share in non-GAAP profit. Analysts tracked by S&P Capital IQ were calling for $2,163.55 million and $3.62 a share, respectively.

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Commenting on the results, CEO Josh Sapan said in a press release:

The fourth quarter and full-year 2014 was strong for AMC Networks with double digit percentage increases in our revenue and cash flow. The strong performance of our original programming with record ratings at our national networks has led to continued increases in affiliate fees and advertising revenues.

What went right:Advertising revenue surged 24.3% in the fourth quarter on "strong demand for original programming," which no doubt includesThe Walking Dead. Season five of the zombie drama kicked off at the beginning of the quarter with another record-breaking premiere. A joint venture giving AMC operational control of BBC AMERICA also aided advertising results and drove higher affiliate fees, leading to a 15.3% increase in distribution revenue. Adjusted cash flow from operations, or AOCF, also improved along with revenue, rising 96.9% year over year in Q4.

What went wrong:International operations are improving but not yet profitable. Operating losses in the unit rose from $16.9 million in last year's fourth quarter to $18.8 million in the current period thanks to $7.7 million in restructuring charges that didn't impact cash flow. In fact, AOCF for the division improved to $3.06 million, up from a $13.1 million loss in last year's Q4. Expect further gains as AMC distributes more of its original programming to abroad territories opened with the Chellomedia deal.

What's next:AMC Networks didn't provide first-quarter guidance in its press release.Analysts tracked by S&P Capital IQ have the company generating $685.6 million in revenue and $1.45 a share in profit versus $524.55 million and $0.99 a share in last year's first quarter.

Longer term, analysts have AMC generating 16.6%average annual earnings growth over the next three to five years.

The article "The Walking Dead" Animates AMC Networks Inc. Earnings originally appeared on Fool.com.

Tim Beyers feels like a zombie when he doesn't get enough sleep -- or enough coffee. He's also a member of theMotley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission, but didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim'sweb homeandportfolio holdingsor connect with him onGoogle+,Tumblr, or Twitter, where he goes by@milehighfool.The Motley Fool recommends AMC Networks. The Motley Fool owns shares of AMC Networks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.