Why AMC Networks (AMCX) Stock Is Falling Today

NEW YORK (TheStreet) -- Shares of AMC Networks Inc. (AMCX) are down -10.24% to $58.81 after the cable channel owner missed its first quarter profit estimates, and as costs jumped.

Leaving out an amortization charge, earnings of $1.04 a share compared with the $1.14 average analyst estimate compiled by Bloomberg.

While sales jumped 37% to $524.6 million, operating expenses were up 48% percent to $376.9 million, the company said.

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TheStreet Ratings team rates AMC NETWORKS INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate AMC NETWORKS INC (AMCX) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has significantly decreased to $24.60 million or 92.86% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • In its most recent trading session, AMCX has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Regardless of the rise in share value over the previous year, we feel that the risks involved in investing in this stock do not compensate for any future upside potential.
  • 46.96% is the gross profit margin for AMC NETWORKS INC which we consider to be strong. Regardless of AMCX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.12% trails the industry average.
  • AMC NETWORKS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, AMC NETWORKS INC increased its bottom line by earning $4.01 versus $1.89 in the prior year. This year, the market expects an improvement in earnings ($4.18 versus $4.01).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 132.9% when compared to the same quarter one year prior, rising from $15.19 million to $35.38 million.
  • You can view the full analysis from the report here: AMCX Ratings Report

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