AMC Networks (AMCX) - Get Report , one of the smaller media companies that could be scooped up in the industry's bubbling consolidation, showed the difficulty in remaining independent Thursday when it reported a 7.7% drop in net income.

AMC reported $77.2 million, or $1.05 s share, badly missing analysts' expectations of $1.29 a share.

However, the owner of cable channels that air The Walking Dead, Orphan Black and others reported quarterly revenue of $684.8, a 13.9% hike that beat the analyst consensus of $678.1 million.

"We remain confident that our approach is the right one to succeed in a highly competitive and consolidating entertainment marketplace," AMC President and CEO Josh Sapan said in a statement, "and we remain focused and committed to continuing to crate and deliver value for our customers."

The weak earnings is having little effect on AMC shares at present, trading at $56.56, up a fraction of a percentage point from the Wednesday close. However, shares have fallen by 36% this year, as analysts worry that its pipeline of new hits has run dry.

Ratings for The Walking Dead dropped this year and new shows including Preacher and Feed the Beast failed to catch fire, according to Michael Nathanson of MoffettNathanson. Nathanson reduced his estimates for the company's third-quarter earnings based on his forecast of lower advertising.

"The market has rightly smelled a brewing problem here and has sold ahead of the negative revisions," Nathanson wrote in his July 26 report,

In July, AMC offered buyout packages to about 200 employees, roughly 6% of its workforce, the industry trade publication Variety reported.

Wall Street analysts have speculated the AMC and Food Network owner Scripps Networks Interactive (SNI) could be acquired as media companies seek to bulk up to better negotiate rates with cable operators who have also consolidated.

AMC said operating income from domestic cable channels, which include its flagship AMC network as well as IFC and BBC America, increased by 12.1% to $178 million on the strength of a 29% hike in advertising revenue that it said was largely the result of the timing of the rollout of new shows on AMC.

The company recorded a 10% increase in the  affiliate fees that cable and satellite operators pay it to carry AMC-owned channels. but lost $7.8 million from its much small foreign operations, primarily from its AMC International channels, and the licensing of its TV show and films to others. The loss was less than the previous quarter, when it recorded a nearly $9 million deficit. It recorded a 4.8% increase in second-quarter revenue.

AMC said it is continuing its share repurchase program, announced in March, to buy back $500 million in stock.  In its most recent quarter, the company said it purchased $48 million of its own stock, with anther $27 million acquired in July.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stock mentioned.