AMC Networks Take $97 Million Hit to Balance Sheet in Q2 on Devaluation

AMC Networks reported its second-quarter 2024 earnings Friday, revealing a $97 million hit to its balance sheet, including a $68 million goodwill impairment charge at the international division and a $29 million long-lived asset impairment charge at BBC America.

The quarter also saw U.S. ad sales drop 11% drop, but a slight increase in streaming subscribers to AMC Networks’ platforms from 11.5 million at the end of the previous quarter to 11.6 million.

Per AMC Networks, “During the second quarter of 2024, we determined that the decline in our stock price was an indicator of potential impairment of goodwill. Accordingly, we performed quantitative assessments for all of our reporting units and concluded that the fair value of the AMCNI reporting unit declined to less than its carrying amount. As a result, we recognized an impairment charge of $68 million, which is included in Impairment and other charges in the condensed consolidated statements of income (loss). Additionally, the Company performed a recoverability test and determined that the carrying amount of the BBCA asset group exceeded its fair value, therefore an impairment charge of $29 million was recorded for identifiable intangible assets and other long-lived assets, which is included in Impairment and other charges in the condensed consolidated statement of income (loss) within the Domestic Operations operating segment.”

Wall Street forecast earnings per share (EPS) of $1.52 on $601 million in revenue, according to analyst consensus data provided by LSEG, formerly Refinitiv. AMC Networks reported adjusted EPS of $1.24 on $625 million in revenue.

“AMC Networks continues to find opportunities in a strategic plan built around programming, partnerships and profitability,” CEO Kristin Dolan said in a letter to shareholders. “Key to our plan is the creation and curation of celebrated films and series, and making them available to audiences everywhere, including through an exciting new branded content licensing agreement with Netflix. In the first half of 2024, we’ve made significant progress against our strategic priority of generating strong free cash flow, and we’re well on our way to achieving our free cash flow guidance for the full year.”

More to come…