'Inside Out 2' success is AMC's saving grace in second quarter
By Claudia Assis and James Rogers
The quarter started slow, but relief came with Disney's 'Inside Out 2,' the cinema chain says. Stock is up in after-hours trades.
Shares of AMC Entertainment Holdings Inc. rose after the closing bell Friday after the movie-theater chain reported quarterly results that met Wall Street expectations. According to the chain, the animated film "Inside Out 2" provided a late-quarter boost.
AMC's stock (AMC), which ended Friday's session down 3.5%, was up 0.4% in extended trades.
AMC lost $32.8 million, or 10 cents a share, versus earnings of $8.6 million, or 6 cents a share, in the year-ago quarter. Adjusted for one-time items, the company reported a loss of 43 cents a share, which was in line with the FactSet consensus.
See: AMC's stock slides 7.6% after CEO warns of lingering weakness from Hollywood strikes
The company, which gave second-quarter guidance last week, said revenue fell to $1.031 billion, compared with $1.35 billion a year ago, also meeting FactSet consensus.
As expected, the second quarter started slow, as the industry felt strains from the 2023 Hollywood writers and actors strikes, Chief Executive Adam Aron said in a statement.
"However, the quarter finished with incredible strength powered by the success of Disney's 'Inside Out 2,' which is now the highest-grossing animated movie of all time," he said.
AMC saw a "remarkable contrast" between the dearth of movie releases earlier in the quarter and the end of the quarter, he said.
Speaking during a conference call to discuss the results, Aron also cited the success of recent releases "Despicable Me 4," "Twisters," and "Deadpool & Wolverine," which, he said, "has set all sorts of revenue and attendance records for AMC."
"The box office has started its big upwards climb - June was only two percentage points less than the box office of April and May combined," he added.
See: AMC's stock climbs on debt-restructuring deal
The CEO said that, while this year's third quarter may not overtake the same period last year, which was marked by the success of the "Barbenheimer" phenomenon, a slew of major releases are expected in the fourth quarter. These include "Joker: Folie à Deux," "Moana 2," "Gladiator 2," and "Mufasa: The Lion King," he added.
Aron also noted that 2025 and 2026 will see another "Star Wars" movie, another "Avengers" movie, and another "Avatar" movie.
Additionally, the CEO highlighted AMC's recently announced debt-restructuring deal. AMC's debt-extension transactions were "a literal game changer" for the company, he said during the conference call.
Also: AMC debt restructuring sparks more buying in the movie-theater chain's junk bonds
AMC ended the second quarter with $770.3 million in cash, excluding restricted cash of $48.3 million.
"Cash is king," Aron said during the conference call. Having ample cash reserves is "the single best strategy for survival," he added.
The movie-theater chain's shares - the original meme stock - are down 19.3% in 2024, compared with the S&P 500 index's SPX gain of 12.1%.
Early Friday AMC rival Cinemark Holdings Inc. (CNK) beat second-quarter earnings estimates, boosted by the success of "Inside Out 2." Cinemark shares ended Friday's session up 7.6%.
-Claudia Assis -James Rogers
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08-02-24 1910ET
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