Even a return trip to Pandora wasn’t enough to lift quarterly earnings at AMC Theatres.
Despite the box office success of “Avatar: The Way of Water,” revenues at the world’s largest cinema chain fell 15% in the fourth quarter, topping out at $990.4 million. That was down from $1.17 billion in the prior-year period. Losses also widened, as AMC posted a net loss of $287.7 million, a steeper shortfall than the $134.4 million in losses it recorded a year ago. AMC lost 26 cents per share, compared to a loss of 13 cents in the same quarter in 2021.
That fell short of Wall Street’s projections. Analysts were expecting quarterly revenue of $1.05 billion and earnings loss of 22 cents per share. AMC’s stock was briefly up nearly 4% in after-hours trading before falling back into negative territory.
But AMC has often seen its share prices rise and fall independent of its financial results. The company, like GameStop, has been seen as a meme stock, one thats price was impacted by the sentiments of its army of retail investors, as well as by short sellers who believe that its shares are overinflated.
The company’s results included a non-cash impairment charge of $133.1 million that was “related to long-lived assets.” Filings suggested that it had to do with lease obligations, as well as the costs associated with closing and reopening certain venues.
AMC has attempted to find ways to expand its brand and launch new revenue streams as the theatrical box office has labored to come back from the pandemic. It has bought a stake in a gold and silver mine, partnered with Zoom to allow companies to book meeting spaces in its venues, and announced this week that it is launching a new line of microwave and ready-to-eat popcorn products that will be available at Walmart.
AMC’s core business still has yet to swing back to pre-pandemic levels even as the fall and winter has fielded hit films such as “Avatar: The Way of Water,” “Puss in Boots: The Last Wish” and “Black Panther: Wakanda Forever.” But global attendance, which has been negatively impacted by a dearth of major studio movies and shifting consumer habits as more movie fans turn to streaming services, continued to fall. AMC said it hosted 49.5 million guests, down from the 60 million customers it fielded in the year-ago period.
The company has fared better than Cineworld, its largest competitor, which was forced to file for bankruptcy in 2022 in the wake of the box office downturn. AMC chief Adam Aron predicted that the worst was behind the exhibition business, noting the influx of new major movies in 2023 and the continued improvement in its financial performance.
“But the real story is that in 2022, AMC Entertainment continued on a multi-year glide path to recovery,” Aron said in a statement. “AMC’s full-year 2022 results represented our strongest year since pre-pandemic 2019, with 2022 results improving over 2021, which in turn were better than those of 2020.”
He added: “We expect the recovery will continue apace in 2023, as Hollywood is expected to release approximately 75% more major movie titles than it did in 2022.”