AMC Theatres Shrinks First-Quarter Loss to $337.4M
AMC Entertainment has shrunk its latest quarterly loss on higher overall revenues as the movie exhibition giant looks for gains from a Hollywood box office rebound.
The parent of AMC Theatres posted a first-quarter loss of $337.4 million, or 65 cents per-share on overall revenues at $785.7 million. That’s an improvement on the year-ago period when AMC posted a first quarter $567 million net loss on $148 million in revenue.
More from The Hollywood Reporter
Fremantle Takes Majority Stake in Element Pictures, Producer of 'The Favourite', 'Normal People'
Lightworks Owner LWKS Acquires Cloud Collaboration Software ioGates
AMC met a Zacks Consensus Estimates forecast of earnings of 65 per-share, up 54.23 percent on the year-ago period, and beat an estimate for quarterly revenues $724.47 million, up 388.51 percent from 2021.
Shares in AMC, a retail trading darling, were up 28 cents, or just over 2 percent to $12.80 in after-market trading as investors digested how the cinema chain is taking advantage of consumers returning to the multiplex as the pandemic wanes.
Ahead of the market close, stock in AMC tumbled $1.25, or 9 percent, as they fell to $12.52 on the day. During the latest quarter, AMC saw gains from tentpoles like Spider-Man: No Way Home, The Batman and Sonic The Hedgehog 2 playing on its screens.
During a post-earnings release conference call, Adam Aron, chairman and CEO of AMC, used much of his prepared remarks to tout rebounding Hollywood box office — including this past weekend’s opening of Dr. Strange in the Multiverse of Madness — as evidence of the continuing appeal of theatrical exhibition for consumers.
Aron predicted that Hollywood box office during the fourth quarter of 2022 will reach, or get close to, pre-pandemic ticket receipt levels. “With the rise of streaming and the corresponding end of theaters, this won’t be the first time or the last time that conventional wisdom will be proven to be filled with so much folly, and so very wrong,” he argued.
At the same time, AMC is looking to diversify away from the ebb and flow of Hollywood box office by getting into new revenue streams like AMC branded popcorn, cryptocurrencies, alternative content like WWE and UFC events in AMC theaters and even acquiring sport rights.
Aron told investors AMC would not fully recover if it simply returned to its pre-pandemic business model as a pure play movie exhibitor. “There’s a myriad of opportunity out there as we build a new AMC or grow our way through value creating initiatives,” he said, as Aron cited a so far profitable deal to buy 22 percent of Hycroft Mining Holding Corp., a gold and silver mining company.
He added AMC will continue to acquire new theater screens domestically over 2022 as it uses a war chest of over $1 billion to grow the company. The exhibitor most recently continued its movie theater acquisition binge by picking up seven former Bow Tie Cinemas locations with 66 screens.
Aron hinted at AMC returning to movie production after current talks with potential partners. “I have to say, there’s a lot of conversations that are underway now with various movie makers about whether we should repeat our activity in prior years of making our own content … It is something that has our attention.”
AMC shares have been a roller coaster ride after the company used its status as a meme stock thanks to rogue retail traders on Reddit and other social media hubs to raise fresh cash at a steep market premium to ensure survival during the pandemic and pay down debt and interest expenses.
During a call where Aron took no questions from Wall Street analysts, he paid tribute to enthusiastic retail investors in the company. But Aron also pointed to a potentially dangerous fringe of shareholders who have reached out to the AMC boss with malice or worse.
“While most (advice) comes in constructively, some comes in with hostility or laced with threats. Most is well intended, but some might be hurled at us with an intent of actually harming me or the company, possibly coming in from short sellers or motivated by malevolent intentions,” Aron reported.
Elsewhere, amid theater reopenings industry-wide, in-cinema advertising network National CineMedia saw its overall revenues rise sharply to $35.9 million for the three months to March 31, against a year-earlier $5.4 million.
At the same time, National CineMedia saw its quarterly net loss attributable to shareholders widen to $25.2 million, compared to $19.4 million in the year-ago period. The culprit is weak ad buys for its theaters.
“While network attendance increased substantially, it remained below historical first quarter levels due primarily to an approximate 57 percent decrease in the number of films released versus the first quarter of 2019. Fewer films and lower overall industry attendance resulted in lower in-theater advertising revenue,” National CineMedia said in a statement as it delivered its latest financial results after the market close on Monday.
