Tuesday evening, AMC Entertainment Holdings (NYSE: AMC), the biggest movie theater operator in the world, gave Wall Street a sneak peek at its performance during the second quarter ended June 30. The reviews were not good and traders found the aisles.
The preliminary results – official results are slate for August 7 – showed AMC expects total revenue rose to a range of $1.2 billion to $1.204 billion, up substantially from $764.0 million in the year-prior quarter. The growth was attributable to more locations and double-digit growth in Europe, while U.S. box office receipts fell 4.4%.
AMC expects to report a net loss for Q2 between $174.5 million and $178.5 million, or $1.34 - $1.36 per share, reversing from a net profit of $24.0 million in the second quarter last year.
Analysts were expecting revenue of $1.26 billion and a net loss of only a penny per share.
AMC’s rough quarter highlights the emergence of an online world looking to the internet for entertainment, as well as box office busts like “Baywatch,” “The Mummy” and “King Arthur” that failed to lure in crowds. Moreover, blockbusters like “Transformers” and “Pirates of the Caribbean” didn’t deliver relative to their huge production budgets.
Even with the latest iteration “Star Wars” coming in December, AMC isn’t optimistic about the rest of the year. Management said that it expects the third quarter to be “very challenging,” aiming to improve its financial performance by tightening its purse strings and offering promotions to get the attention of moviegoers.
To that point, AMC expects to realize a minimum of $30 million in adjusted EBITDA at the hands of its cost savings and revenue enhancements in the second half of the year.
Still, the company provided 2017 guidance of revenues between $5.10 billion and $5.23 billion and a net loss between $125.0 million and $150.0 million, or $0.97 - $1.17 per share.
Market participants gave the outlook a thumbs down, sending shares of AMC hurtling to an all-time low at $15.15. Shares have eked up off that low about an hour into the session, although they’ve still been bruised 24.3% at $15.75.
