Shares of AMC Entertainment (NYSE:AMC) are in full focus ahead of the company’s first-quarter earnings report on the morning of May 5. Meanwhile, shares of AMC stock are up by almost 40% this year on the heels of a heightened level of movie releases, including successes like The Super Mario Bros. Movie and John Wick: Chapter 4. Earlier this month, the movie theater chain announced that it had experienced its busiest weekend year-to-date and the busiest Friday to Sunday period since December 2019.
Meanwhile, the fate of an AMC reverse stock split, an increase in authorized shares, and a conversion of all outstanding shares of AMC Preferred Equity Units (NYSE:APE) into AMC is hanging on the line. The Delaware Court of Chancery is currently targeting June 29-30 to decide on a class action filed by AMC shareholders. These shareholders stated that the votes of AMC and APE shareholders on proposals should be counted separately, which has resulted in a status quo order being levied on AMC. The order prevents a reverse split, an increase in shares, and a conversion of APE into AMC. AMC and the plaintiffs actually reached a settlement to the order, although the court denied it.
With that in mind, let’s take a look at three things to watch when AMC reports its earnings.
AMC Stock: 3 Things to Watch When AMC Reports Earnings May 5
Analysts are forecasting revenue of $938 million for Q1, which would imply year-over-year (YOY) growth of 19.35%. Last quarter, AMC posted revenue of $991 million, down by 15.43% YOY. For adjusted EPS, analysts expect a loss of 17 cents compared to a loss of 65 cents a year ago. That would equate to a net loss of $206 million compared to a net loss of $337 million YOY.
Just as important as revenue and EPS is guidance for the upcoming quarter and current year. Analysts have forecasted revenue of $1.21 billion and an adjusted EPS loss of 7 cents for the second quarter. For the entire year, revenue is estimated to be $4.47 billion, while adjusted EPS is expected to be a loss of 41 cents. In 2022, the company reported revenue of $3.91 billion and an adjusted EPS loss of 69 cents.
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.