AMC Entertainment Falls as Results Prompt Profit-Taking on Recent Rally
By Dhirendra Tripathi
Investing.com – AMC Entertainment stock (NYSE:AMC) traded over 5% lower in Tuesday’s premarket after the multiplex operator's latest quarterly results showed how far it still has to go to put the pandemic behind it.
The U.S.'s largest movie theater chain posted a narrower loss and higher revenue than expected but the stock had gone into the results somewhat overextended after rising 28% since the start of the month.
"We need to sell more tickets in future quarters than we did in the most recent quarter, and adjusted EBITDA is still well below pre-pandemic levels,” Chairman and Chief Executive Officer Adam Aron said in a press release disclosing the company’s third-quarter numbers.
According to Bloomberg, which quoted Wedbush Securities analyst Alicia Reese, AMC’s domestic market share declined in the third quarter after gains in the first half of the year.
The company lost $5.4 million before interest, taxes, depreciation and amortization in the quarter, despite having nearly all of its U.S. theaters open for the whole period. The quarter was affected by the surge in Delta-variant Covid-19, which dented appetite for sitting in closed spaces in large gatherings.
That compares to an adjusted EBITDA of $269 million in the fourth quarter of 2019, the last before the pandemic struck.
Revenue jumped sixfold to $756 million but was still down more than 40% from two years ago.
Aron, a mini-Twitter celebrity who engages with the audience for feedback on cryptos and new launches, has said October theater admission revenues were the highest of any month since before the pandemic shut its cinemas.
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