AMC Stock Gains After Topping Revenue and Earnings Estimates

By Adriaan Brits Thursday, March 11, 2021

AMC stock is trading more than 8% higher in the pre-market trading session after it topped revenue estimates for its Q4.

AMC theater in New York City.

AMC Stock Rallies on Better-Than-Expected Q4 Revenue

AMC stock has witnessed a volatile trading environment since January when a group of retail investors centered around Reddit’s “WallStreetBets” forum started aggressively buying GameStop stock, as well as shares of AMC and other companies that attracted high-selling interest from short-selling hedge funds.

The cinema business, which operates the largest movie theater chain in the United States (US), reported it lost $945.8 million in Q4, or $3.15 per share on an adjusted basis. This is slightly better than the $3.16 per share loss expected from market analysts. The company said it took a non-cash impairment charge of $466 million.

"This past year has presented AMC with the most challenging market conditions in the 100-year history of the company. As unprecedented as these times have been, so, too, is the unprecedented drive and commitment of the AMC team,” Adam Aron, the chief executive officer of the company, said in a statement.

Q4 revenue came in at $162.5 million to top $144.3 million expected from Wall Street. On a full-year basis, the cinema business reported revenues of $1.24 billion and a huge loss of $4.59 billion or negative $39.15 per share.

“For all the talk of the steps we at AMC have taken to bolster our position, the real salvation of our company will be because of vaccination,” Aron told analysts on a call.

Aron added his business is now focused on recovering revenues after it has spent the past year trying to salvage the business. The management is focused on “directing a surge in movie-going and on the recovery of AMC,” Aron added.

The cinema business is now resting all its hopes on the rollout of COVID-19 vaccines across the United States (US). The company scheduled releases of major 2021 movies, such as Walt Disney Co’s “Black Widow,” “Godzilla vs. Kong,” “Top Gun: Maverick,” and “F9,” from May onward.

The vaccine rollout has allowed cinema businesses to start reopening theaters in recent weeks, with AMC now saying 90% of all theaters are open. European theaters are expected to open soon, the company added.

AMC stock is up about 365% since the beginning of the year thanks to the army of retail traders. The company has a market capitalization of about $4 billion.

Summary

AMC stock is trading higher in pre-open today after the business reported better-than-expected revenue for Q4 and a lower-than-expected loss as it shifts its focus toward reopening cinemas.

About the Author


Headshot of Adriaan Brits

An analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in advanced analytics and media.

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