AMC Stock Plunges 26% After Cost-Cutting Announcement

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Courtesy of AMC Theaters

AMC Entertainment is slashing costs as the U.S. box office continues to nosedive.

The world’s largest theater chain announced on Tuesday that it plans to save $30 million by the end of the year by reducing operating hours and cutting staffing levels, among other measures. The plan went into effect this month.

The belt-tightening wasn’t enough to assuage Wall Street. Shares of AMC plummeted 27% in after-hours trading on the announcement and on weaker than anticipated second-quarter guidance. AMC doesn’t share its earnings until Aug. 7, but the company said it expects to report a loss of between $178.5 million to $174.5 million for the three-month period ending in June. That would be a sharp drop from the $24 million in profit it logged over the same time frame last year. It would also amount to a loss of between $1.36 and $1.34 a share.

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Revenues are expected to top out at $1.2 billion, which would be an increase from the $764 million that AMC reported in the year-ago period. Analysts had been expecting the exhibitor to report revenues of $1.26 billion and a one cent loss.

The summer box office has been a disappointing one for exhibitors. Box office flops such as “Baywatch” and “King Arthur” have dragged down ticket sales, while hits such as “Wonder Woman” and “Guardians of the Galaxy Vol. 2” haven’t been potent enough to staunch the bleeding. Domestic revenues this summer are down 7%, while second-quarter sales in North America fell 3.3%.

Even with another “Star Wars” film hitting theaters in December and a “Thor” sequel in November, AMC isn’t expecting the box office to fully rebound. The theater chain projected that North American box office revenues will be down nearly 2% this year at $11.2 billion.

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  1. Tony Wright says:

    Who wants to pay $15 to get in the movie that they may not like, then order 15$ for a bag of popcorn, $10 for a small soda, $20 for a box of DOTS? It’s too expensive to go to the movies today… Unless the movie is an guaranteed blockbuster, people are willing to wait for it’s release to DVR or Netflix. If AMC lowers those asinine prices, they may be able to stop the bleeding….. for now.

    • Then, there are movies like Mother and Suburbicon, which insult half of their customer base. Plus, the movie stars who insult half of the studio’s customer base.

      Why pay $30 – $40+ to listen to Hollywood insult me, while squinting at an out of focus screen, in a room full of noisy, messy, loud mouthed strangers? …with a sound system that may or may not work properly?

  2. I have not bought a Theater Ticket in over 10 years, so the downturn is not due to me. I have You Tube Red, Netflix and Amazon, so my need for theater tickets is likely over. I probably watch 8 to 10 movies a week and in lots of them nobody has a cell phone, so that shows how old they must be. Of course in my early days, all of the movies that I wanted were sans cell phones and strong on pay phones of which it is not easy to find one today. Life changes for the USA and me also, and I am enjoying my changes as the theater business is likely not.

  3. Not a surprise.

    Nobody wants to go to the theaters and pay $20 to be lectured and talked down to by Hollywood 1%ers who think the “common people” need to be taught Hollywood Liberal morality.

  4. CJ says:

    If Hollywood stopped using motion pictures as a medium to spread liberal ideology, perhaps more people would return to the theater. As it is now, a large and growing portion of the population doesn’t want to pay $15 for the displeasure of being indoctrinated for two hours.

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