Participants of r/WallStreetBets are smiling ear to ear as AMC (NYSE:AMC) opened higher by 10%. This is because the movie theater chain released its preliminary, unaudited earnings for the fourth quarter this morning. AMC reported revenue of $1.17 billion, which beat the FactSet analyst estimate of $1.09 billion. The revenue figure would be the highest revenue since 2020, at the beginning of the coronavirus pandemic. AMC stock is surging ahead today as a result.
However, AMC remains largely unprofitable. AMC reported that it expects to see a net loss between $114.8 million and $194.8 million. This is a wide range and suggests that AMC’s business is difficult to predict. In addition, the FactSet estimate for Q4 was a net loss of $119 million, which is at the lower end of AMC’s net loss estimate. During Q4 of 2020, AMC reported a net loss of $946.1 million. AMC CEO Adam Aron added that:
“The fourth quarter of 2021 marks a meaningful milestone with positive EBITDA of more than $145 million, positive Operating Cash Generated of more than $215 million, and a record year-ending liquidity position of $1.8 billion.”
So, what else should investors know about AMC’s Q4 preliminary earnings? Let’s jump right in.
AMC Stock: What to Know About AMC’s Preliminary Earnings
- AMC is the largest movie theater exhibition company in the world. The company operates approximately 950 theaters and 10,500 screens globally.
- AMC’s net loss included an “estimated non-cash impairment charge related to long lived assets of $50.0 million to $125.0 million.”
- Expected earnings before interest, taxes, deductions and amortizations (EBIDTA) for Q4 is expected to be between $146.8 million and $151.8 million. This is a massive improvement from Q4 2020’s EBITDA loss of $327.5 million.
- Furthermore, operating cash burn was $216.5 million for Q4. Cash and cash equivalents at quarter end was $1.59 billion.
- AMC differentiates itself from other movie chains by offering a loyalty and subscription program, premium reclining seats and “enhanced food and beverage choices.”
- Risks to AMC’s business include the coronavirus pandemic, excessive cash burn, changes in consumer preference and obligations related to deferred rent and planned capital expenditures.
- Investors should note that AMC’s “preliminary estimated financial information presented is subject to change, and our actual financial results may differ from such preliminary estimates and such differences could be material.”
- In addition, AMC has an average price target of $10.45 among seven firms with coverage of the stock.
- The average price target implies a 39% loss from current prices.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.