AMC Entertainment (NYSE:AMC) has been the talk of the town following Vice Chancellor Morgan Zurn’s decision to block the conversion of AMC Preferred Equity Units (NYSE:APE) into AMC stock. Many investors had believed that Zurn would approve the conversion following Special Master Elise Amato’s green light.
Following the decision, CEO Adam Aron released a letter to investors, disclosing that he had filed a “modification of the legal release surrounding the settlement of the Delaware litigation.” In the letter, Aron profusely highlighted the necessity of raising equity capital and warned that AMC could run out of cash by 2024 or 2025 if no equity is raised.
This news has overshadowed AMC’s latest announcement. The movie theater chain recently announced that it will report second-quarter earnings on Aug. 8 after the market close.
AMC Stock: AMC to Report Earnings on Aug. 8
The success of recent movie releases “Barbie” and “Oppenheimer” has AMC stock shareholders excited, although these numbers will not be reflected in AMC’s second-quarter earnings. Over the weekend, “Barbie” raked in around $155 million in ticket sales while Oppenheimer pulled in $82.4 million. “Barbie” took the prize for highest opening of 2023.
“If you’re going to a theater right now, the communal experience is reminiscent of major Marvel and Star Wars films, but without those franchises remotely involved,” said BoxOffice.com Chief Analyst Shawn Robbins.
For the second quarter, analysts expect AMC to report an adjusted EPS loss of 4 cents and revenue of $1.269 billion, up by 8.79% year-over-year (YOY) and 32.95% quarter-over-quarter (QOQ). If the revenue estimate is achieved, that would mark AMC’s first time reporting quarterly revenue of at least $1 billion since Q2 2022. Profitability still seems to be a far reach for AMC, as analysts forecast negative adjusted EPS until Q4 2025, when EPS is expected to be zero cents. GAAP EPS is expected to be 1 cent during that quarter.
Just as important as current earnings is guidance. One might expect sequential revenue growth for the third quarter due to popular movies, but revenue is actually expected to fall by 15.86% QOQ to $1.068 billion, reflecting YOY growth of 10.24%. For the third quarter, adjusted EPS is forecast to come in at a loss of 10 cents. For the full year of 2023, revenue is forecast to be $4.5 billion on top of an adjusted EPS loss of 37 cents.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
