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AMC Reports Quarterly Earnings as Delta Variant Imperils Recovery




New blockbuster films like “Fast 9” and “A Quiet Place Part II” bolstered revenues at AMC Entertainment, even as the reemergence of a new and highly contagious variant of coronavirus threatened to undue the theater industry’s recent gains. A better-than-expected earnings report sent shares of the company surging in after-hours trading.

Revenues at the exhibition giant hit $444.7 million, up from $18.9 million in the year-ago period. Losses also shrank. AMC recorded a net loss of $344 million, down from the $561.2 million in losses it recorded during the same time-frame in 2020. The company also logged a net loss of 71 cents per share, an improvement on the losses of $5.38 per share that AMC posted in the year-ago period.

The comparisons were understandably stark. At this point last year, most of AMC’s locations were shuttered, movies weren’t being released theatrically and COVID-19 was raging unchecked through the country. AMC’s attendance numbers reflect that story. Admissions for the three-month period ending in June hit 22 million. Last year at this point they stood at 100,000.

Wall Street was expecting the company to report a loss per share of 94 cents on revenue of $382.25 million. Thresholds that AMC easily eclipsed.

And yet, the results come at a difficult moment for the theater business, as the spread of the Delta variant appears to be dampening attendance. It’s a sector that is also being hit hard by the shifts in distribution models as companies like Disney and Warner Bros. continue to release movies on their in-house streaming services at the same time they debut them in cinemas.

None of that may matter. AMC is currently experiencing the benefits of being a meme stock, with the exhibitor embraced as part of the Reddit-fueled retail investment revolution taking place, one that has also lifted the likes of GameStop, BlackBerry and other companies that long ago slipped the surly bonds of balance-sheet based metrics to trade on populist sentiment. True to form, the stock rose more than 7 percent on news that AMC had handily beaten projections.

AMC chief Adam Aron even appeared to give a hat tip to these new investors, saying in a statement, “Our sheer will to drive through this COVID-19 crisis clearly resonated
amongst those who also were committed to our survival, because seeing movies in theatres has been a central part of the cultural fabric of society the world over for decades and decades and decades,” he said. “There are many who shared our passion that moviegoing at our theatres should continue for future generations. Accordingly, we are ever so grateful to the friends and allies that AMC has gathered along the way. They can take comfort in knowing that as we rebuild our company, our deeper cash reserves allow us to stay the course, to innovate again and to capitalize on opportunities
around us.”

In recent months, AMC’s leaders have successfully renegotiated the company’s massive debt obligations. The exhibitor said it has cash of $1.81 billion and more than $2 billion in liquidity.

“We would like to think that someday when a movie is filmed about AMC and COVID, its title will be one compelling word, ‘Recovery,’” Aron said. “But, only time will tell.”

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