Citing lousy box office performance, AMC Entertainment Holdings has reported a third-quarter loss of $42.7 million, compared with earnings of $30.4 million for the 2016 quarter.
AMC made the announcement after the stock market closed Monday afternoon. Shares fell 9% in afterhours trading on the New York Stock Exchange to $11.10, down $1.10.
“We have been predicting weakness in the third quarter industry box office, due to the quantity and subject matter of the films that were scheduled to be released,” said Adam Aron, president and CEO. “Not surprisingly, our foreshadow was accurate.”
The third quarter was one of the roughest in recent years for the domestic box office with Sony’s “The Dark Tower” and STXfilms’ “Valerian and the City of a Thousand Planets” falling short of expectations. August box office was the lowest in a decade.
“In a high fixed-cost, low variable-cost business, this has led to lower EBITDA generation for AMC in the third quarter of 2017,” Aron added.
Total adjusted EBITDA increased 2.1% to $147.4 million and revenues were up 51.2% to $1.18 billion — which included $333 million of revenues from international theaters due to the acquisitions of Odeon Cinemas Group and Nordic Cinema Group Holding AB. Aron said he’s “bullish” about the current quarter.
“Among many other hit films this year, movies like ‘It’ in September, ‘Thor: Ragnarok’ in November and soon ‘Star Wars: The Last Jedi’ in December, demonstrate for all to see what we know to be true,” he said. “When Hollywood and international movie makers offer appealing movies, Americans and Europeans will pour into our theatres in huge numbers and pay top-dollar to do so.”
“Thor: Ragnarok” has taken in $427 million worldwide in less than two weeks. But North American box office remains down 4.8% for 2017. Aron reiterated that his optimism about the moviegoing business.
“In our view, the weakness of the summer box office is not indicative of a long-term trend, especially immediately after two and a half years of record box office performance and just before what we expect will be strong and robust consumer demand through year end,” he said. “We are similarly confident and excited about the film slate that is coming in 2018 and again in 2019. Accordingly, we remain optimistic about the viability and strength of the movie theatre industry generally, and of AMC specifically.”
AMC Entertainment is the largest movie exhibition company in the U.S., Europe and the world with 1,006 theatres and 11,046 screens. AMC was acquired by Dalian Wanda Group, a Chinese conglomerate, in 2012 for $2.6 billion.