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AMC Entertainment Holdings has seen its first-quarter revenues rise and its net loss narrow as James Cameron’s Avatar: The Way of Water played on its screens.
On Tuesday, the parent of AMC Theatres reported first-quarter revenues growing 21 percent to $954.4 million. The per-share loss came to 17 cents, against a year-earlier loss of 33 cents, and the first-quarter loss came to $235.5 million, which narrowed a year-earlier loss of $337.4 million in 2022, as AMC continues to recover from the COVID-19 pandemic and contends with changing consumer habits in the age of streaming.
AMC also pointed to box office drivers like The Super Mario Bros. Movie currently and upcoming tentpoles like The Little Mermaid, Fast X, Guardians of the Galaxy Vol. 3 and Spider-Man: Across the Spider-Verse as underpinning optimism about continuing strong Hollywood movie ticket receipts for the rest of the year.
During the latest quarter to March 31, 2023, AMC reported a global attendance at 47 million, just up from 39.7 million during the year-ago period as the company emerged from the depths of the pandemic. “Those 47 million people tell us what we have known for years and years, that movie theaters are very much alive and very much at the center of the cultural fabric of the United States for years and decades to come,” a bullish AMC Theatres CEO Adam Aron told analysts on a morning conference call.
The latest earnings from AMC Theatres will be watched for clues as to just how much the U.S. exhibition sector has gained from a Hollywood box office rebound at the multiplex as the COVID-19 crisis has faded but the streaming revolution continues. AMC investors are also viewing a volatile share price for the cinema giant, given its strong backing from retail investors, current box office trends and its high debt load.
In early 2021, AMC Theatres became a popular stock among “meme” traders after the company appeared close to bankruptcy amid the pandemic fallout at movie theater chains. The stock surge helped the company strengthen its financial position and diversify its revenue streams — the latest initiative is starting to sell branded microwave and ready-to-eat movie popcorn varieties, initially at Walmart.
AMC Theatres during the latest financial quarter continued to convert AMC Preferred Equity Units, or so-called APEs, into the company’s common shares to raise $80.3 million in gross proceeds from offloading 49.3 million APE units.
During the latest quarter, AMC Theatres recorded a one-time charge of $126 million related to a potential settlement of a class action lawsuit in a Delaware court brought by the Allegheny County Employees’ Retirement System over the introduction of the APE units. Settling the Delaware Chancery Court lawsuit, which is now under review, will allow the mega-exhibitor to continue selling shares to raise cash to extend the company’s recovery, Aron told analysts.
“Make no mistake. We’re not out of the woods yet,” he added in commentary around his latest financial results. The exhibition giant continues to have a high debt load following disruption to its sector from the pandemic crisis and its impact on the local multiplex.
“But we are indeed on an improving ramp,” he said of efforts to restore the company’s fortunes amid a rebound in overall Hollywood box office for the exhibition industry. Aron predicted domestic box office revenues for the industry would hit $9 billion “or considerably more than that” in 2023.
To gird for the future, AMC Theatres closed around 150 “money-losing” locations since the pandemic disrupted its chain, while launching another 66 new theaters. “We’re going to continue to look at our theaters every year. And if there’s dead weight in our fleet around the world, we’ll take them out of our fleet,” Aron told analysts, while adding the chain will continue to add new theaters to its portfolio, including those from rival circuits.
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