AMC Entertainment blames Hollywood’s “lackluster film slate” for the below-expectations financial results the No. 2 exhibition chain reported this morning for its Q2.
Net earnings of nearly $24.0 million were down 45.4% vs the same period last year on revenues of nearly $764.0 million, down 7%. That was short of analysts’ revenue expectations for nearly $773 million. Diluted earnings at 24 cents a share also missed the Street’s target of 27 cents.
AMC’s stock price dropped 6.9% in pre-market trading.
CEO Adam Aron attributes the numbers to the “industrywide box office revenue decline that was down domestically some 10.7% per screen year-over-year.”
He adds, though, that the trend “has already reversed itself with industry box office revenues up more than 7% as of July 29th, and a potentially record setting film slate being close at hand for calendar year 2017.”
He’s also upbeat about his recently-announced $1.2 billion deal to buy UK-based Odeon & UCI Cinemas and a just-sweetened $1.2 billion offer for Carmike Cinemas — which accounted for $5.5 million in M&A expenses in Q2. Either transaction would make AMC the world’s largest theater chain.
“Taken together, this level of activity and progress is almost breathtaking, enabling AMC to be uniquely positioned to deliver additional value to our guests, associates and shareholders,” Aron says.
In Q2, AMC’s ticket sales fell 9.8% to $481.2 million as admissions dropped 7.1% to about 50 million. That shows an average outlay per ticket of $9.63, down 2.8%.
Concession sales also fell 2.8% to $243.5 million, with outlays per capita increasing 4.7% to a record $4.87. AMC has set records in that metric in nine of its last 10 quarters.
AMC operated 5,334 screens at 386 venues as of the end of June.