AMC Networks Inc., operator of AMC and other cable channels, reported a lower-than-expected quarterly profit as it spent more on programming ahead of the final seasons of its long-running hits "Mad Men" and "Breaking Bad."
AMC, whose shares were down 3 percent in morning trade, did not disclose details of its marketing and programming costs.
But Albert Fried & Co. analyst Rich Tullo said the network was spending more to develop content to replace both shows on its AMC channel as well as expand programming on its other channels, which include Sundance and IFC.
"Breaking Bad," a drama about a chemistry teacher who starts dealing in drugs to support his family, is due to end its run in September. The final season of "Mad Men," a drama about a New York-based ad agency set in the 1960s, has not been announced.
AMC also produces the zombie drama "The Walking Dead," the most popular drama on cable TV, whose season ended before the start of the quarter but whose high ratings have helped to attract advertisers to AMC.
AMC debuts its gritty Detroit-set crime drama "Low Winter Sun" on Sunday and recently announced two new shows, "Turn," set during the American War of Independence, and "Halt & Catch Fire," about the personal computer boom of the 1980s.
AMC's revenue rose about 16 percent to $379.3 million in the second quarter ended June 30, helped by a 14 percent rise in advertising revenue to $147 million. Analysts on average had expected revenue of $368.1 million.
Expenses rose 22.3 percent in the quarter, the company said on a conference call, working out to about $208 million.
AMC recorded a gain of $133 million from a settlement with Dish Network Corp. related to Dish's decision in 2008 to drop the now-defunct Voom HD network owned by AMC and former parent Cablevision Systems Corp.
AMC's net income tripled to $135.7 million, or $1.87 per share from $41.5 million, or 58 cents per share, a year earlier.
Excluding the settlement, the company earned 74 cents per share, falling short of the 78 cents per share analysts had expected, according to Thomson Reuters I/B/E/S.
AMC shares, which had risen 10 percent in the three months to Wednesday, were down 2.6 percent at $69.30 in mid-morning trading on the Nasdaq.
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