Trading of AMC Entertainment (NYSE:AMC) stock was briefly halted this morning following the release of its preliminary second-quarter earnings. It was resumed at 9:43 ET, and, as of this writing, AMC stock is currently about 7% down.
AMC posted revenue of $1.03 billion, down 23.54% from $1.347 billion a year ago. Preliminary revenue was in line with the consensus analyst estimate of $1.03 billion.
The movie theater chain also reverted back to being an unprofitable company with a net loss of $32.8 million compared to net earnings of $8.6 million year-over-year (YOY). Diluted loss per share fell to approximately 10 cents from a diluted earnings per share of 6 cents. Analysts were expecting a GAAP EPS loss of 47 cents.
On the bright side, cash and cash equivalents totaled $770.3 million as of June 30, compared to $435.3 million a year ago. Several equity offerings during the past year have contributed to AMC’s increased cash position. However, this has also resulted in dilution, with AMC stock down by 90% YOY.
“As we accurately predicted and previously disclosed, the prolonged actors and writers strikes of 2023 severely reduced the number of movies being released theatrically in the early months of 2024,” said CEO Adam Aron. “This explains the weakness in our preliminary Q2 2024 results, as contrasted with the same quarter of a year ago.”
AMC Stock: AMC Reports Preliminary Second-Quarter Earnings
At the same time, Aron is upbeat about the company’s future prospects. He believes that movie theater attendance is on an upward trajectory, citing an increase in June revenue compared to April and May. That trajectory has continued into July.
Aron also expects industry-wide revenues to increase during the second half of the year and in 2025 and 2026.
“This in turn suggests that AMC should enjoy increasing Adjusted EBITDA, if as and when overall industry revenues are climbing,” said Aron. “Such improvements in revenues, earnings and Adjusted EBITDA are our current expectations going forward, all of which shine brightly on AMC’s future.”
AMC is still grappling with a large debt load, which it has offset through equity offerings. More of these will likely come in the future, diluting shareholders in the process. According to YCharts, AMC’s shares outstanding have increased by 38.68% since the beginning of the year.
AMC will report its second-quarter earnings on Friday, Aug. 2, after the market closes.
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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
