AMC Entertainment said its box-office results are still suffering from the effects of last year's Hollywood strikes but Wall Street analysts remain cautiously optimistic about the movie-theater stock.
Late Friday, AMC offered preliminary first-quarter results ahead of the full release scheduled for May 8. It expects a loss of 62 cents a share in the quarter that ended in March, while the consensus call among analysts tracked by FactSet was for 79 cents. Revenue is expected to be $951.4 million, slightly lower than last year's level but beating analyst expectations of $881 million.
AMC's results could have been even better had it not been for the writers' and actors' strikes' that ended in late 2023.
"While we anticipate that the second-quarter box office will continue to be affected by the 2023 Hollywood strikes, we are ebullient about the upcoming film slate, and we expect to see an increasingly strong box office as the year progresses," CEO Adam Aron wrote in a statement.
The stock was down 8.2% to $3.13 Monday morning.
On Monday morning, Wedbush's Alicia Reese said that the preannounced results likely mean the company is improving its market share from the 22.5% Wedbush has estimated. "A strong rebound coming in the second half of 2024," she added, continuing to rate the stock at Hold, with a target of $4 for the price.
"We believe [the preliminary results] demonstrate the exhibitor's continued industry box office outperformance in the post-pandemic recovery era," wrote B. Riley Securities' Eric Wold. He maintained a Neutral rating and stock-price target of $8.
To be sure, the world's largest cinema chain still has a debt problem. AMC has interest payments and lease payments to cover while repaying about $3 billion in debt that is coming due over the next three years.
On Friday, Bloomberg reported that AMC's lenders have proposed to give the theater chain more time to repay its near-term debt, allowing the balance sheet to regain its pre-Covid strength.
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