AMC Entertainment Posts Higher First-Quarter Earnings, Beats Estimates
The cinema giant, led by CEO Adam Aron, saw a revenue boost from 'Black Panther' and 'Jumanji.'
Cinema giant AMC Entertainment on Monday posted higher first-quarter earnings and revenues on the strength of Black Panther and Jumanji's box-office returns and its Nordic Cinema Group Holding acquisition internationally.
AMC, which is owned by China's Dalian Wanda Group, recorded per-share earnings of 14 cents, which beat an analyst estimate of 9 cents. Surpassing the Wall Street forecast by 5 cents sent shares up by just over 4 percent, or 75 cents, to $17.95 in after-hours trading.
Net earnings for the three months to March 31 climbed to $17.7 million against a year-earlier $8.4 million. Overall revenues rose 8 percent to $1.387 billion, exceeding a $1.35 billion analyst forecast.
"We are truly heartened by AMC's start to 2018 and couldn't be more excited about the prospects for the year after the record-breaking success of Avengers: Infinity War early in the second quarter," AMC CEO Adam Aron said in a statement.
During an analyst call that followed the release of his latest results, the AMC boss took a bullish stance on his company's prospects going forward, as Aron pointed to a bounce-back in early 2018 box office on the strength of Black Panther and Avengers ticket receipts after the "painful depths" of the summer 2017 multiplex business.
The exec argued market analysts who had questioned the prospects of movie theaters amid the rise of streaming content competition like Netflix and Amazon Prime had been proven wrong. "When Hollywood makes movies that people want to see, they flock to our theaters and they do so in huge numbers," Aron added.
The exhibition giant hasn't softened its opposition to MoviePass, with Aron reiterating that the controversial movie-subscription service's business model remained "unsustainable."
"$9.95 for up to 30 movies a month is not enough money to spread around MoviePass, the Hollywood studios and theater operators so that Hollywood can make quality movies and theaters can operate quality theaters," he argued. Aron added that MoviePass in March and April paid AMC an average $12.02 per-ticket for subscribers entering its theaters.
MoviePass subscribers on average in March went 2.62 times to an AMC theater to see a movie, and in April went 2.75 times, it was reported. "I got a calculator out and multiplied 2.75 times $12.02 and got to a number that's considerably larger than $9.95," Aron told analysts.
The AMC head also said the current negotiations between the major studios and domestic exhibitors to create a premium VOD window for consumers had stalled. "Everyone seems to sense that PVOD is no longer on any kind of near-term horizon," Aron told analysts.
During the latest quarter, admissions revenues at AMC rose 7 percent to $875 million, and food and beverage revenues were up just over 2 percent to $405.8 million. That follows AMC doing deals to acquire Carmike Cinemas, the U.K.-based Odeon & UCI Cinemas chain and the European theater giant Nordic Cinema Group.
The result is a geographic expansion for AMC that, during the latest quarter, saw domestic revenues dip slightly to $982.1 million, against a year-earlier $992.2 million, while international markets saw first-quarter revenues jump to $401.5 million, compared to $289.2 million in the same period of 2017.
AMC, like rival U.S. exhibitors, is also installing luxury recliners to its theaters and offering better food and beverage choices to improve the moviegoing experience.
The chain, which operates around 8,200 screens in about 660 AMC theaters across the U.S., is also the world's largest exhibitor.
May 7, 3 p.m. Updated with comments by CEO Adam Aron made during an analyst call.