AMC Entertainment Holdings Inc. reports third-quarter results after the market close Wednesday with summer blockbuster movies “Barbie” and “Oppenheimer” expected to feature prominently for the cinema chain and meme-stock darling.
Last week, AMC’s stock
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climbed after rival Cinemark Holdings Inc.’s
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third-quarter top- and bottom-line beat, boosted by the hit movies, which sparked a cultural phenomenon dubbed “Barbenheimer.” Last month Imax Corp.
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also reported third-quarter results that beat analysts’ top- and bottom-line estimates, fueled by the blockbusters.
Related: The ‘Barbenheimer’ buzz may be over, but consumer enthusiasm for movies is still strong, says Cinemark CEO
AMC, Cinemark and Cineworld Group PLC’s Regal Cinemas all enjoyed a foot-traffic boost thanks to “Barbie” and “Oppenheimer,” according to analytics company Placer.ai. The data, released in July, showed an increase of around 75% in foot traffic at AMC.
AMC enjoyed its best week ever based on admissions revenue from July 21 through July 27, the movie-theater chain said on July 31, setting a new company record for U.S. and global theaters. Some 65 U.S. locations also set single-week box-office records, including 13 locations in the greater Los Angeles market. The record revenue was driven primarily by the strong openings of “Barbie” and “Oppenheimer,” which both hit theaters July 21 and saw strong moviegoer demand throughout their first full week, according to AMC.
“In addition to last weekend being the highest grossing AMC weekend in 4 years, the week of July 21-27 was the highest grossing for AMC in our entire 103-year history. The best in ONE HUNDRED AND THREE YEARS !!!” tweeted AMC CEO Adam Aron on July 31.
Related: AMC bonds see bullish activity while meme-stock darling rides the Taylor Swift wave
Last month analyst firm Roth MKM said AMC is set to reap the benefits of better-than-expected box-office results. “Higher-than-projected box-office results are causing us to raise our 3Q estimates,” Roth MKM analyst Eric Handler wrote in a note. Roth MKM raised its AMC third-quarter revenue estimate to $1.304 billion from $1.209 billion, an increase of 35% on a year-over-year basis and down just 1% from the third quarter of 2019, before the COVID-19 pandemic. The analyst firm also raised AMC’s adjusted EBITBA estimate to $161 million from $116 million.
Roth MKM has a sell rating for AMC.
Of seven analysts surveyed by FactSet, four have hold ratings and three have sell ratings on AMC.
It has been an eventful few months for AMC. Following a months-long court battle, the company’s stock underwent a 1-for-10 reverse split in late August, and AMC also completed the conversion of its AMC Preferred Equity units, or APEs, to common stock.
Related: AMC’s debt-to-equity, late payments, could be ‘red flags,’ warns Creditsafe
In September AMC raised approximately $325.5 million in an at-the-market equity offering with the sale of 40 million shares. AMC has said that the equity offering boosts its cash reserves, addresses current liquidity concerns and fortifies the company’s balance sheet.
AMC has been basking in the glow of Taylor Swift’s record-breaking concert film, which opened Oct. 12. In September AMC announced that the film had shattered the company’s record for single-day advance ticket sales, with $26 million in ticket-sales revenue on Aug. 31.
In addition to showing “Taylor Swift: The Eras Tour” in its theaters, AMC is also the theatrical distributor for the movie. AMC Theatres Distribution and subdistribution partners Variance Films, Trafalgar Releasing, Cinepolis and Cineplex Inc.
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have clinched deals with cinema operators representing more than 8,500 theaters globally to show the film, according to AMC.
Here are other key numbers to look for in Wednesday’s report:
Earnings: The FactSet consensus calls for a loss of 25 cents in adjusted earnings per share, down from a loss of $1.76 in the year-earlier period.
Revenue: Analysts tracked by FactSet expect the movie-theater chain to report third-quarter revenue of $1.260 billion, up from $1.005 billion in the same period last year. Admissions revenue is expected to be $739 million, and concessions revenue is expected to be $449 million, according to FactSet.
Stock movement: Last quarter AMC’s stock fell 3.7% the day following its results, which were boosted by the company’s highest quarterly attendance since 2019. Shares have fallen 72% in 2023, compared with the S&P 500 index’s
SPX
gain of 14.3%.
What analysts are saying:
“We think AMC is well-positioned against an improving industry backdrop. We expect 2023 North American box office to end up 20% over 2022, or ~78% of 2019 box office, with AMC at least maintaining its 22% market share if not expanding with its vast network of premium large format screens. Moviegoers are finicky with content these days, but we are seeing that they also increasingly opt for premium screens and a larger basket of high-margin concessions.” — Alicia Reese, Wedbush
“Liquidity continues to matter since AMC is still burning cash. FCF for the quarter is estimated at a usage of $83mn, including a usage of $26mn from OCF. However, unencumbered cash should increase q/q from $435mn in 2Q23 to ~$650mn aided by equity capital raises from the sale of 40mn shares ($8.14 average price per share) via the company’s now completed ATM.” — Eric Handler, Roth MKM
“The overwhelming success of [‘Taylor Swift: The Eras Tour’]has come as a boon for theaters, especially during times when Hollywood release schedules have been affected by strikes. The concert movie genre appears to be gaining traction again.” — Mike Hickey, Benchmark
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