AMC Entertainment (NYSE:AMC) stock is in the red today after the movie theater chain reported its first-quarter earnings. During the quarter, revenue tallied in at $951.4 million, beating the analyst estimate for $870.86 million but falling by 0.31% year-over-year (YOY). The company’s adjusted diluted loss per share was 78 cents compared to the analyst estimate for a loss of 79 cents and improving from a loss of $1.31 a year ago. It’s worth noting, as AMC pointed out, that there were 263.4 million weighted average shares outstanding as of March 31 compared to 137.4 million shares as of March 31, 2023.

“While the second quarter box office will continue to be affected by the 2023 Hollywood strikes, we continue to be ebullient about the upcoming film lineup in the second half of 2024 and throughout 2025,” said CEO Adam Aron.

However, AMC stock is sinking lower due to a weak attendance figure. U.S. attendance was 30.49 million, reflecting a yearly decline of 5.8%. That contributed to total attendance falling by 2.1% to 46.63 million. International markets attendance offset some of the decline by rising 5.8% to 16.14 million.

AMC Stock Sinks Following Q1 Earnings

What’s more, average screens fell by 3% to 9,703 while adjusted net loss was $204.5 million compared to $179.7 million last year, reflecting a decline of 24.8%. On the bright side, net loss was $163.5 million compared to $235.5 million, or an improvement of 72%.

Prior to earnings, AMC was down by about 47% year-to-date (YTD) on the heels of a weak box office showing. Dilution also factored into the decline. During Q1, AMC exchanged 2.5 million shares for $17.5 million in 2026 second lien notes. In Q2, the company raised gross proceeds of $124.1 million by issuing and selling 38.5 million shares. That brought AMC’s cash balance to $624.2 million as of March 31. Meanwhile, Q1 quarterly cash burn — as calculated by net cash used in operating and financing activities — was $238 million.

All in all, it appears that AMC posted a quarter better than what analysts had expected. However, the company’s looming debt pile, dilution and lack of profitability remain a major issue. As of March 31, corporate borrowings totaled $4.54 billion while other long-term liabilities was $101.8 million.

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.