AMC Entertainment Holdings Inc. reported a narrower-than-expected quarterly loss as movie theaters continued to rebound from the Covid-19 pandemic.
(Bloomberg) — AMC Entertainment Holdings Inc. reported a narrower-than-expected quarterly loss as movie theaters continued to rebound from the Covid-19 pandemic.
The world’s largest theater chain generated first-quarter sales of $954.4 million, up 21% from a year earlier. Investors were expecting $959 million. The company’s loss, at 13 cents a share after adjustments, was smaller than analysts’ projections for a loss of 16 cents. The shares were up 1.4% to $6 at 11:43 a.m. in New York.
Movie-theater stocks have rallied since the beginning of the year thanks to a strong performance from films including Creed III, Ant-Man and the Wasp: Quantumania and Avatar: The Way of Water. Cinemark Holdings Inc., which has nearly doubled this year, reported first-quarter results that beat Wall Street estimates, including adjusted earnings of $86.2 million before interest, taxes, depreciation and amortization.
Read More: Cinemark 1Q Revenue Beats Estimates
“This progress is a testament to the ongoing recovery in the industrywide box office,” AMC Chairman Adam Aron said in a statement. He added that the results represent AMC’s “strongest first quarter in four full years.”
Still, a full recovery of the box office to 2019 levels isn’t expected until early next year at the earliest, leaving AMC in a precarious financial situation as it burns through its cash reserves. It’s also facing a lawsuit from shareholders over a plan to raise money by converting its preferred equity units into common stock.
Last year, rival Cineworld Group Plc, which owns Regal, filed for bankruptcy. The chains have repeatedly blamed the dearth of available films from studios for their woes, rather than moviegoers’ lack of interest in returning to theaters.
Companies including Apple Inc. and Amazon.com Inc. are committing at least $1 billion annually for films released in cinemas, Bloomberg has reported. Paramount Global, Walt Disney Co. and Warner Bros. Discovery Inc. are also increasing their output of movies for theaters after experimenting with distributing films on streaming services alone.
On a conference call with investors Friday, Aron said the company was working on a private-label candy offering to help offset the rising cost of the snacks from present suppliers.
Aron also said he didn’t see an immediate impact from the Hollywood’s writers strike that began this week. The work stoppage will mostly hurt TV production.
“The movies for ’23 and ’24 have pretty much already been written and in many cases they’ve already been filmed,” he said.
(Updates with stock trading in second paragraph, comments in last.)
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