AMC Theater Chain’s Profit Falls Short of Estimates, Shares Drop

(Bloomberg) — AMC Entertainment Holdings Inc., the world’s largest theater chain, reported fourth-quarter earnings that fell short of Wall Street estimates, sending the shares lower.

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AMC posted profit of $42.5 million before interest, taxes, depreciation and amortization, according to a statement Wednesday. That was less than the $46.7 million analysts were forecasting. The company reported a loss of 54 cents a share, excluding some items, less than the 67 cents seen by analysts.

Chief Executive Officer Adam Aron has lamented the “anemic” state of the box office in recent months. The company, which carries long-term debt and lease obligations of $8.73 billion, has skirted insolvency in the wake of the Covid-19 pandemic through share sales and other maneuvers.

Shares of AMC fell as much as 18% to $4.10 in extended trading before partly recovering. Fueled by retail investors at the height of the pandemic, AMC briefly traded over $450 in June 2021, giving Aron the opportunity to raise money.

S&P Global Ratings has a CCC+ junk designation on AMC, with a negative outlook, reflecting “its substantial debt burden” and expectations that revenue will fall 8% to 9% this year because of a limited slate of film releases from Hollywood studios this year.

Sales for the quarter rose 12% to $1.1 billion, beating projections of $1.05 billion.

The company raised about $325.5 million through the sale of 40 million shares last September, a move that it said would address a cash crunch as the movie-theater industry rebounds.

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