AMC Entertainment Holdings Inc., the world’s largest theater chain, posted a narrower quarterly loss, beating analysts' estimates with results that nonetheless underscore the movie industry’s struggle to draw fans back to cinemas and compete with streaming options at home.
With theaters back open, the second-quarter loss shrank to 71 cents a share excluding items, AMC said Monday, better than the 94-cent loss analysts were predicting. Revenue soared to $444.7 million, from virtually nil a year ago, and was better than the $382.3 million that Wall Street had expected.
With second-quarter revenue less than a third of the summer-season peak of $1.51 billion two years ago, AMC needs more fans in seats to cut its losses. One of the biggest movies of the year, “The Suicide Squad,” opened to North American sales of about $27 million last weekend, a fraction of what major films normally do.
AMC said on Monday that customers are returning after the entire industry shut down in 2020, when the coronavirus was raging across the world. Attendance totaled 22.1 million at its theaters globally in the period. But many of this year’s biggest movies are also being offered online on the same day that they open in theaters.
While struggling to stay solvent, AMC became a popular “meme” stock this year, soaring from under $10 to more than $72 at one point. That allowed management to raise cash, refinance and stave off bankruptcy. But borrowings have stayed high at more than $10.4 billion in long-term debt and leases. The company has more than $2 billion in cash and unused revolving lines of credit.
Adam Aron, chief executive officer, sees small investors, who now make up the majority of AMC shareholders, as key to his success. He’s offered them special access to new movies, free popcorn and coffee, and in an unconventional move will take questions directly from them later Monday.
Shares rose as much as 5.1% to $35.50 in after-hours trading. The stock has jumped 15-fold this year, mostly as a result of a frenzy of internet traders.
—Bloomberg News
