AMC Entertainment’s revenue plunged in the last quarter to $ 162 million, from close to $ 1.5 billion the previous year, as the global pandemic has shrunk the show. 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. For the full year 2020, AMC said it lost $ 4.58 billion against losses of $ 149 million for the entire year 2019.
As of March 5, AMC operated 527 of its 589 domestic locations and 78 of its 356 locations internationally. In regions where cinemas are not yet open, AMC said it continues to have “productive discussions with local and state authorities about the appropriate time for resumption of operations”.
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“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 figures, which were revealed the same day, California Governor Gavin Newsom said Los Angeles cinemas would be released to reopen this weekend. . Previously closed venues in New York opened last week.
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 only at 25% capacity, or at most 50 people per screen. AMC has opened all of its 13 locations in New York. When Los Angeles is online, that would be a chance for the two largest film markets in the country. However, ongoing shutdowns in major European markets are a major problem for studios.
Meanwhile, AMC’s shares rose from a 52-week low, below $ 2, to above $ 20. Shares closed on Wednesday ahead of the numbers, down 6%, almost $ 10. Wall Street analysts think it 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 ”.