AMC Entertainment Inc. posted a significant turnaround in earnings for the third quarter.
The nation’s largest theater chain recorded $ 3.2 million (20 cents a share) in net income for the period, vs. a net loss of $ 3.1 million (20 cents) in the comparable quarter last year.
Revenues at the Kansas City-based company shot up 20.1% to $ 105.5 million, fueled in large part by a hit-laden slate of films. “Aladdin,””A Few Good Men” and “Home Alone 2: Lost in New York” were released in the period.
Wall Street investors sent the stock up 14.6% to $ 6.875.
“It was better than anyone was looking for,” said Jeffrey Logsdon, an analyst with Seidler Amdec Securities Inc. But, he noted, AMC has been known for repeatedly reporting extraordinary items, making it difficult to make quarterly comparisons.
A combination of box office draw and cost-cutting campaigns, however, yielded the high earnings, said Phil Singleton, AMC’s chief operating officer. Since assuming the post 14 months ago, he has cracked down on expenses and lopped off under-performing assets.
Singleton took a $ 2.5 million charge against earnings in the quarter for ending some leases.
The biggest gains have come from slicing overhead costs by nearly 8%, exceeding Singleton’s goal of 5%. Part of that comes from consolidation of its circuits last November.
One distraction may be a recently filed lawsuit that calls into question the performance of AMC chairman Stanley Durwood. The suit, by former employee Scott Wallace, charges Durwood with allegedly self-dealing through a company run by him and his children.
Declining to comment on the court action, Singleton said: “We obviously intend to vigorously defend ourselves.”