U.S. movie theater chain AMC Entertainment (AMC) has reported third-quarter financial results that surpassed the consensus expectations of analysts.
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The company, which has struggled since the COVID-19 pandemic struck in 2020, posted an earnings per share loss of -$0.04. That was better than a loss of -$0.09 expected on Wall Street. Revenue in the July through September quarter totaled $1.35 billion, which was better than the $1.33 billion estimate of analysts who track the company’s progress.
However, despite beating forecasts on the top and bottom lines, AMC’s revenue in the third quarter was 4% lower than a year earlier. And the company reported a decline in attendance at its movie theaters due to fewer blockbuster films being released this past summer. Attendance at AMC’s theaters dropped 11.5% to 65,087 from 73,576 in the same quarter of last year.
Hollywood Strike Impacts
Management at AMC said they are still dealing with lingering impacts from last year’s strike by Hollywood actors and writers, which shut down filming and post-production for several months and delayed the release of many blockbuster movies.
Consumers have also been pulling back their discretionary spending on entertainment and moviegoing due to economic pressures. However, AMC CEO Adam Aron said he expects the industry-wide box office to rise in the coming two years.
AMC stock has declined 25% this year.
Is AMC Stock a Buy?
The stock of AMC Entertainment has a consensus Moderate Sell rating among four Wall Street analysts. That rating is based on no Buys, two Holds, and two Sell recommendations made in the last three months. The average AMC price target of $3.73 implies 18.56% downside potential from current levels.
