AMC Entertainment (AMC) earnings Q3 2022

AMC Entertainment on Tuesday reported another fourth-quarter loss despite higher revenue from a year ago, as it cut operating costs.

The world’s largest movie theater is struggling with heavy debt, a drain on its inventory and a shortened movie release schedule on blockbusters. While the summer box office is strong, August and September are warmer, as studios release fewer movies on the big screen.

For the period ended Sept. 30, the company’s net loss narrowed from a year ago to $226.9, or 22 cents per share, which was not quite as much as Wall Street had expected. . Earnings have increased and exceeded expectations. AMC said the number of customers has increased in terms of revenue and increased sales of food and beverages at its theaters.

Here’s what the company reported, along with what Wall Street expected, according to a Refinitiv survey of analysts:

  • Loss per share: an adjusted loss of 22 cents versus an expected loss of 26 cents
  • Have got: $968 million vs. $961.1 million is expected

The company’s stock was down about 4% in after-hours trading.

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AMC is working to lighten its debt load. In October, he refinanced and paid off some of his debt, extending his term to 2027, after completing a $400 million private offering.

The company came back from the brink of bankruptcy in 2021 thanks to millions of retail investors who turned its shares into a meme fund. Since then, AMC has made several plans to raise capital to pay off its debts and invest in acquisitions, movie theater improvements, a popcorn business and a gold mine.

“We’re not out of the woods yet,” CEO Adam Aron said in a Tuesday call with investors. “Although the number of cases is increasing, it is still falling to pre-pandemic levels.”

Although AMC has a strong arsenal of cash, it continues to spend more than it makes each quarter on operations related to concessions, movie theater costs and rentals. The company said it burned through more than $179 million in cash in the third quarter.

The company will continue to invest in its theaters, improve the movie screens and increase the number of special effects screens, such as IMAX and Dolby Cinema, among its footprint.

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CFO Sean Goodman said on Tuesday’s call that the company expects to improve its earnings in the fourth quarter. Although reducing debt and increasing liquidity are its main tasks, the company is open to finding “interesting opportunities,” and is looking to its film competitors to compete. now the money.

Earlier this year, AMC issued a portion to common shareholders in the form of preferred shares called “APE.” But the company may not be able to fully scale up the sale of new shares before investors withdraw their support, analysts said.

The company said it will sell 425 million of these preferred shares. On Tuesday, he sold about 14.9 million shares, which increased the profit to about $ 36.4 million.

People have returned to the cinemas after the coronavirus pandemic and they are spending more than tickets and popcorn. However, the lack of stable theater releases will weigh heavily on the industry in the final months of the year.

The domestic box office peaked at $1.95 billion in ticket sales between July 1 and Sept. 30, down 31% from 2019 levels, according to ComScore. The box office also saw fewer wide releases compared to pre-pandemic times, with only 19 films debuting in more than 2,000 locations during their opening weekends, down 24% from 2019.

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AMC management expects the release of Walt Disney’s “Black Panther: Wakanda Forever” to be one of the biggest box office hits of the year.

Theaters are expected to see a strong slate of movie releases in 2023, and AMC should be able to ride out a lack of releases until then due to its huge budget.

Shares of AMC have declined nearly 80% since January and hit a 52-week low on Monday, falling to $5.17 a share, ahead of the company’s earnings report in Tuesday. Aron attributed the drop in AMC’s stock to macroeconomic headwinds, including inflation, and the performance of competitors such as Cineworld, which recently filed for bankruptcy protection.

Correction: An earlier version of this story misstated the name of the company’s CFO, Sean Goodman.

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