AMC Entertainment Beats Second-Quarter Earnings Estimates, Touts Box Office

Matt Winkelmeyer/Getty Images
AMC Entertainment CEO Adam Aron

"It is finally time for the sky-is-falling-in cynics to admit that they misinterpreted a brief slump in moviegoing last summer," says the cinema giant's CEO Adam Aron.

Cinema giant AMC Entertainment on Wednesday posted record second-quarter earnings and revenue, along with records for admissions and concession sales.

AMC, which is owned by China's Dalian Wanda Group, recorded earnings of 17 cents per share, which beat a consensus Wall Street estimate of 14 cents. Earnings for the three months to March 31 hit $22.2 million, a big swing from a year-earlier loss of $176.5 million.

Overall revenue rose 20 percent to $1.44 billion, against a year-earlier $1.2 billion, which exceeded a $1.43 billion Wall Street forecast. The biggest box-office drivers for AMC during the second quarter were Avengers: Infinity War, A Quiet Place and Deadpool 2.

"Obviously we are very pleased by AMC’s record results for the second quarter of 2018, especially given the magnitude of the impressive 20 percent increase in total revenues and an 80.3 percent year-over-year growth in adjusted EBITDA for AMC," AMC CEO Adam Aron said in a statement ahead of an analyst call.

During that call, Aron touted AMC's Stubs A-List movie subscription program, which was revealed Tuesday to have signed up more than 175,000 members since launching five weeks ago, a move that comes as rival MoviePass struggles.

The AMC topper said another 8,000 A-List sign-ups were made overnight, underlining impressive growth for the movie subscription service. "These are huge numbers. That pace can't continue, but we did design A-List to compete well in its own right and it is doing so. We designed it to be profitable for our studio partners and profitable for us, and to be sustainable," he told analysts.

While not naming MoviePass by name, Aron added A-List was picking up "defectors" from the embattled rival as the concept of a movie subscription service evolved. "We got A-List into the marketplace at a time when we could take advantage of all this demand out there to buy tickets the new way, in multiples, rather than one at a time," he said.

Aron also told analysts A-List was priced right at $20 a-month, given its take-up so far, and that the movie subscription program would represent a small part of AMC's overall exhibition business as moviegoers continued to buy tickets one at a time well into the future.

A bullish Aron during the call also argued how robust the movie exhibition business is as 2018 is beyond the midway point. "It is finally time for the sky-is-falling-in cynics to admit that they misinterpreted a brief slump in moviegoing last summer. Our industry is flourishing and strong, and the prospects for AMC are enormously bright," he said earlier in the statement that accompanied the financial results.

"The movie business and the movie theaters business and AMC are all thriving, flourishing, strong and healthy," Aron added during the call. During the latest quarter, admissions revenue jumped 17 percent to $896.3 million and food and beverage revenue rose 19.2 percent to $445.8 million.

Aron told analysts that AMC had not yet made a decision on going forward with a possible London Stock Exchange listing for its European theaters, and the exhibitor has raised its projections for the number of theaters it intended to build in Saudi Arabia to between 50 and 100.

AMC earlier won the country's first license to operate cinemas alongside its local partner, the Development and Investment Entertainment Company, and has opened Saudi Arabia's first movie theater in Riyadh's King Abdullah Financial District.

Aug. 1, 7 a.m.: Updated with comments by AMC CEO Adam Aron made during an analyst call following the release of his company's second-quarter results.