The summer of flops claims another casualty.
AMC Entertainment, the world’s largest theater chain, reported calamitous second quarterly earnings on Friday, mere days after its move to lower its annual projections resulted in widespread selloffs of its stock.
The Leawood, Kansas-based company reported revenue of $1.2 billion and loss of $1.35 a share for the three month period ending in June. The losses paled in comparison to the per-share profits of 24 cents that the company reported in the year-ago period. They did outstrip the $764 million in revenue that AMC announced for the same quarter in 2016, but AMC has acquired several theater circuits since that time, including Carmike Cinemas and European exhibitors UCI & Odeon and Nordic Cinema. Its greater size contributed to those gains. Wall Street had once been looking for AMC to report revenues of $1.23 billion and losses of 11 cents per share.
In a statement, AMC chief Adam Aron laid the blame for the poor results on the movies. Flops and duds such as “King Arthur” and “Baywatch” have dragged down ticket sales. Hits such as “Wonder Woman” have helped ease the pain, but the output from major studios has not matched the commercial success of previous years.
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“While we strongly believe AMC is well positioned for the future, and are confident in the long term prospects for AMC to drive revenue and earnings growth, we are nonetheless extremely disappointed by AMC’s financial and operating results for the second quarter of 2017,” said Aron.
The AMC chief said he did not expect the box office to rebound until the fourth quarter of the year, which will host sequels to Thor and Star Wars. It’s a brutal downturn for a year that saw ticket sales surge on the back of spring hits like “Beauty and the Beast” and “Logan.”
“Consumer demand to ‘go to the movies’ was robust as 2017 started out in the first quarter,” said Aron. “And just ahead of us is a strong fourth quarter film slate, that creates the opportunity to lessen the angst surrounding box office weakness industry-wide in the second and third quarters of 2017. As a result, we remain optimistic about our ability to deliver meaningful value to our shareholders both for the balance of 2017 and in the years ahead.”
After losing roughly a quarter of their value earlier in the week, AMC shares were up 2.65% in pre-market trading.