AMC's stock falls as movie-theater chain highlights weakness in its Q2 guidance
By James Rogers and Ciara Linnane
Earnings were hit by the lingering impact of the writers and actors strike last year, says CEO Adam Aron
Shares of AMC Entertainment Holdings Inc. (AMC) were down 4.7% Wednesday, after the movie-theater chain and original meme stock said the Hollywood actors and writers strikes had created lingering weakness in the second quarter.
The company updated guidance for the quarter, calling for a net loss of $32.8 million, or 10 cents a share. That's after net earnings of $8.6 million, or 6 cents a share, in the prior year's quarter.
Analysts surveyed by FactSet were looking for a bigger loss of 47 cents a share.
The company expects second-quarter revenue of $1.03 billion compared with $1.35 billion in the same period last year. Analysts surveyed by FactSet are also looking for revenue of $1.03 billion.
"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 AMC CEO Adam Aron, in a statement. "This explains the weakness in our preliminary Q2 2024 results, as contrasted with the same quarter of a year ago."
However, the CEO also pointed to "incredibly good news" during the second quarter.
"AMC enjoyed a significant increase in our daily revenues in June of 2024 as compared with those of April and May of 2024," he added. "Indeed, the industry box office for June was only 1.4% less than that of April and May combined."
The company ended the quarter with cash and cash equivalents totaling about $770.3 million, he added.
The updated guidance is the latest news on the company, which earlier this week conducted a debt restructuring that will extend up to $2.45 billion of debt maturities to 2029 and beyond from 2026.
The company was facing a refinancing cliff of about $2.9 billion in 2026, so the move will give it significant leeway as the release slate continues to recover from pandemic doldrums.
Aron described the debt restructuring as a "major milestone" for the company.
"This agreement represents an undeniably strong vote of confidence by our lenders in AMC's future and provides AMC with the necessary financial flexibility to capitalize on an expected strong industry recovery trajectory," he said.
Related: AMC's debt restructuring a 'significant move'-but expect volatility, Wedbush says
AMC will report its second-quarter results after market close on Aug. 2.
The stock has fallen 21.9% in the year to date, while the S&P 500 SPX has gained 14.8%.
Read also: AMC debt restructuring sparks more buying in the movie-theater chain's junk bonds
-James Rogers -Ciara Linnane
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