AMC Entertainment Gains After Losses From Covid Begin to Ebb

AMC Entertainment Holdings Inc., the largest movie-theater chain in the world, rose after posting a fourth-quarter loss that was smaller than analysts expected, as cinema reopenings spurred better performance than in the previous period.
On Wednesday the theater chain reported an adjusted fourth-quarter loss of $3.15 a share, compared with the average analyst expectation of a $3.53 loss. Revenue slumped to $162.5 million. The company took noncash impairment charges of $466.1 million.

The outlook this period is improving: Theaters in the two largest U.S. markets, Los Angeles and New York City, are opening back up, suggesting ticket sales should continue their rise from nearly zero during parts of 2020. With that, the company says it’s confident it can ride out the rest of the pandemic without the risk of bankruptcy, citing it has more than $1 billion on hand.

“Our most important single point of focus, after ensuring a safe and clean environment for our theater guests and workforce, has been to strengthen AMC’s liquidity profile,” Chief Executive Officer Adam Aron said in a statement. The company has raised about $2.2 billion from new debt and equity capital since March 2020, he said.
AMC shares were up 6.5% in extended trading at 4:57 p.m. in New York. They have soared more than 360% so far this year, largely due to “meme” investors who have pumped up the stock.

About 67% of the Leawood, Kansas-based chain’s domestic locations were open as of Dec. 31, while only 30% of its international locations were open. Attendance has been limited by capacity restrictions, with many markets requiring the company to cap ticket sales at about 25% of total seats available. Overall, 8.1 million customers visited the chain in the fourth quarter, about a 90% decline from the same period last year.
While Reddit traders have caused AMC’s stock price to soar, analysts have raised concerns that the underlying business of the theater chain remains troubled. The company has raised more than $1 billion since December, in an effort to avoid bankruptcy, and Wall Street will be looking for information about its cash burn, outstanding rental payments and potential asset sales.
(Updates with share price in fifth paragraph.)

Published on
March 10, 2021, 4:31 PM EST

Updated on

March 10, 2021, 4:57 PM EST

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