Meme stock AMC earnings hit as analysts see investors withdraw money on AMC shares

Cinema chain AMC Entertainment (AMC) reported third-quarter results after ending Monday, beating expectations, and the company said it was “encouraged” by trends so far in the fourth quarter.

Nevertheless, the AMC stock was down after hours. The chain reports as it tries to ride on the reopening of the economy and a wave of enthusiasm from private investors against analysts’ concerns about basic business conditions.


AMC revenue

AMC lost 44 cents per share during the quarter. It was not as bad as the forecast of 53 cents per share from FactSet.

Revenue was $ 755.6 million. The figure was above the expected $ 708 million.

“Thanks to an increasingly appealing film overview, increasing number of covid-19 vaccinations, our commitment to robust health and safety protocols and our own greatly increased marketing activity, AMC’s theaters in the US, Europe and the Middle East safely returned 40 million guests during the third quarter of 2021 , “said CEO Adam Aron in a statement.

AMC said it had liquidity of more than $ 1.8 billion at the end of the quarter, including cash and unutilized lines of credit.

The company said it does not expect to borrow below these credit limits over the next 12 months. It had free cash flow of negative $ 138 million during the quarter.

Cinemas have suffered over the years as viewing at home becomes more popular and as the window shrinks between a film’s theatrical release and its streaming release. The outbreak of the coronavirus pandemic meant that they had to contend with closures and service restrictions.

Aron, in the company’s results release, said that “substantially all” cinemas worldwide were open for the entire quarter. It was the first time since the fourth quarter of 2019.

In September, Macquarie Research, in a research note on AMC shares, also raised questions about the theater chain’s influence, cash flow, sales trends and underperformance of non-blockbuster films to be launched this year.

Macquarie said at the time that AMC had deferred rent of $ 420 million in the second quarter, on top of the annual rental cost of $ 1 billion.

Rental costs in the third quarter were around $ 215 million.

AMC shares

The AMC share fell 2.7% to 43.85 in the stock market today. The shares rose earlier in the day from the 50-day line.

The stock had a compound rating of 81. The EPS rating is 44.

The AMC stock was one of the first to be sucked up in this year’s meme stock craze, which was originally aimed at GameStop (GME) and other very short-lived companies. Shares in AMC rose in January and June, before giving up gains.

AMC stock analysts are cautious

AMC has tried to exploit the explosions in the share price. And the chain has tried to engage retail shareholders more enthusiastically.

AMC has sold shares, raised money, paid down debt and started expanding again in Europe and the Middle East, Wedbush analyst Michael Pachter said in a research note last week. Nevertheless, he downgraded the AMC stock to underperformance. And he said he thought “the majority of retailers will eventually withdraw their money and move on.”

Nevertheless, AMC said that October’s theater ticket sales were the highest since pandemic-related closures began last year. The company last month also announced a large turnout on weekends for films such as “Venom: Let There Be Carnage” and “No Time to Die”.

“You know my thoughts on ‘sages’ predicting the demise of cinemas: Choke on that, baby, #CHOKEonTHAT,” Aron said on Twitter in connection with a press release announcing the strong showing for these films.

Utilization, cash flow, Bitcoin

Aron has said that 365,000 people had joined the AMC Investor Connect communication and rewards program for holders of AMC shares – with offers of free popcorn for new and existing members.

The theater chain recently said it would accept Bitcoin for online ticket and concession payments by the end of the year. It will also accept online payments in Ethereum, Litecoin and Bitcoin Cash. In October, Aron said on Twitter that customers could buy digital gift cards with Dogecoin and other cryptocurrencies using a BitPay wallet.

“In response to a Twitter poll posted on Aaron’s feed late last month asking if the company would take the Shiba Inu coin as well, 81.4% of respondents voted”Yes Shiba Inu for sure.


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