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Exhibition giant AMC Theatres, which is owned by China’s Dalian Wanda Group, on Thursday swung to a fourth-quarter profit as it cited industry box office strength.
The mega-exhibitor posted a profit of $170.6 million, compared with year-ago loss of $276.4 million, due to one-time items that included $310 million of prior year tax expense, on revenues of $1.413 billion, virtually unchanged from a year-earlier $1.416 billion.
The diluted earnings per share came to 43 cents, well ahead of Wall Street’s consensus forecast for a profit of 17 cents per share.
AMC president and CEO Adam Aron in a statement pointed to “the tremendous momentum of the industry box office, which was the fifth record-setting year in the last seven years, combined with AMC’s transformative growth initiatives and the popularity of the new AMC Stubs A-List subscription program, drove full-year global attendance to an all-time high of 359 million guests, up 6.1 percent in the U.S. markets, resulting in strong financial performance across the board.”
Shares in AMC Theatres were up 32 cents, or 2.28 percent, to $14.35 in after-market trading on the New York Stock Exchange after news of the earnings. Overall attendance at AMC theaters rose 1.9 percent to 94 million patrons during the latest quarter.
U.S. market attendance jumped 5.3 percent to 65.1 million customers, while international markets attendance fell 5 percent to 28.8 million, in part due to competition for the multiplex from the FIFA World Cup. Fourth-quarter revenues rose to $1 billion in the U.S. market, compared to a year-earlier $978.3 million, while they fell in international markets to $407.2 million, against a year-earlier $438.5 million.
During the latest quarter, admissions revenue fell to $862.3 million, compared to a year-earlier $897.1 million, as the U.S. average ticket price was impacted by declines in Imax and 3D volumes, as well as A-List and promotional pricing. Food and beverage revenues came to $435.1 million, up from a year-earlier $415.3 million.
The latest financial results come a day after AMC Theatres said its ticket subscription service, Stubs A-List, now has more than 700,000 members after adding another 100,000 patrons in January and February. That comes as rival MoviePass continues to struggle.
AMC’s Aron discussed A-List on an after-market analyst call amid investor worries over the subscription service’s upfront marketing costs and high customer use following the initial launch. A-List allows moviegoers to see three films a week in any format for either $19.95, $21.95 or $23.95 a month, depending upon the state.
Aron on the call said the economics of A-list “are very attractive and we are considerably outperforming our original model.” He reported A-List members average about 3.3 visits in their first full calendar month of use, and by month three are down to 2.8 visits.
Aron added A-List members are coming to the multiplex more often than non-members, bring friends and family along with them, and spend more on food and drink on average. “We can say categorically that we are capturing an increased share of wallet from people who sign up for A-List,” he said.
A-List members also enjoy all the discounts and benefits of AMC Stubs Premiere, including free upgrades on popcorn and soda, free refills on large popcorn, express service at the box office and concession stand and no online ticketing fees.
The service, launched last June as an alternative to MoviePass, has resulted in 14 million trips to AMC cinemas, including additional tickets purchased for family and friends of AMC Stubs A-List subscribers.
Aron insisted the A-List ticket program was doing little to crowd out full-paying patrons during peak attendance hours. “It is shocking how many empty seats we have in the exhibition industry,” he told analysts, as Aron likened cinemas more as churches likely to be filled on Sunday than airplanes that tend to run at near-capacity throughout the week.
Feb. 28, 3 p.m. Updated with comments by AMC president and CEO Adam Aron made during an analyst call.
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