AMC Entertainment’s revenue fell in the last quarter to $ 162 million, from close to $ 1.5 billion a year, with the global pandemic squeezing the display. This exceeded expectations, reaching about $ 20 million above Wall Street consensus estimates. The stock rose 3% at the end of the trading session.
Net losses increased to $ 946 million, including a strong one-time loss charge, from $ 13.5 million in the previous year.
More than the deadline
As of March 5, AMC operated 527 of its 589 domestic locations and 78 of its 356 locations internationally. In regions where cinemas are still unable to open, AMC said it continues to have “productive discussions with local and state authorities about the appropriate time for resumption of operations”.
“Last year presented AMC with the most challenging market conditions in the company’s 100-year history,” said CEO Adam Aron in a statement. He said things are looking up, as “vaccinations are taking place in the United States at a fast pace, our cinemas in New York have finally opened with cinemas in Los Angeles probably opening soon too, successful movie titles are scheduled for to be launched in a significant amount in the coming months, and we have more than $ 1 billion in cash. Putting these facts together, we have reason to be optimistic about the AMC’s ability to reach the other side of this pandemic. ”
Aron will hold a conference call at 5 pm Eastern Time to discuss the numbers.
It was difficult, but thanks to the capital increases last year and early 2021, AMC avoided bankruptcy and has funds to remain solvent over the summer. That, and its new floating stock, which received a huge boost from retailers on Reddit in January, gives the company more flexibility as vaccinations open up the economy and moviegoers return to cinemas – in greater numbers and, hopefully, with cinemas in greater capacity than some markets currently allow.
AMC’s first home cinemas opened in late August. In a crucial move for the industry, New York City opened in theaters on March 5 after a year, but with only 25% capacity or a maximum of 50 people per screen. AMC has opened all of its 13 NCY locations. When Los Angeles goes online, it will represent the two largest film markets in the country. However, ongoing shutdowns in major European markets are a major problem for studios.
Meanwhile, AMC’s stock rose from a 52-week low, below $ 2, to above $ 20. Shares closed on Thursday ahead of the numbers, down 6%, almost $ 10.
Wall Street analysts think he is overvalued, despite the prospects for a more optimistic outlook. “We think AMC may take years before it is able to revise its previous growth strategy as it pays off its growing mountain of debt,” said Michael Pachter of Wedbush Securities in a note earlier this week. It has a “neutral” rating for the action. It has doubled its target price to $ 5, which is good, but it is still well below where it is currently trading.
Analyst Rich Greenfield slapped AMC this morning, saying, “There is a substantial disconnect between the future of aggregate film assistance and, in turn, AMC’s profit power in relation to its current business value and capital structure. excessively leveraged ”.