Should engine run cooler when AC is engaged?

Did a road trip today and got to run my newly reinstalled AC system. To my surprise, every time I turned on AC the temp gauge dropped 5-8 degrees. I'd expected just the opposite. Can anyone tell me why the engine temp drops while AC is running? My system is factory inside the cabin, an older Sanden-type compressor under the hood (340 engine). Water gauge is aftermarket, I believe accurate, reading at the intake manifold.