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AMC Loss Widens but CEO Is Optimistic as Vaccine Rolls Out

AMC Entertainment, the largest U.S. theater chain, reported a wider quarterly loss but the CEO expressed optimism as the coronavirus vaccine rolls out.
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Shares of AMC Entertainment, the largest U.S. theater chain and a focus of the Reddit investment crowd, were higher after hours on Wednesday after the company reported a wider quarterly net loss on revenue about a ninth of the year-earlier figure.

In the past year, moviegoers and everyone else were tied up in knots by the coronavirus pandemic. And AMC faced the most challenging market conditions in its 100-year history, President and Chief Executive Adam Aron said in a statement.

Now, "vaccinations are occurring in the U.S. at a brisk clip, our theaters in New York City have finally opened, with theaters in Los Angeles likely opening shortly as well, blockbuster movie titles are currently scheduled to be released in significant quantity in the coming few months, and we have more than $1 billion of cash on hand," the executive said. 

"Taking these facts together, we have reason to be optimistic about AMC's ability to get to the other side of this pandemic."

The Leawood, Kan., chain posted a fourth-quarter net loss of $6.21 a share, compared with a loss of 13 cents a share in the year-earlier quarter. The adjusted loss for the latest period was $3.15 a share. 

Revenue was $162.5 million compared with $1.45 billion a year earlier.

A survey of analysts by FactSet produced consensus estimates of a GAAP net loss of $3.03 a share, or an adjusted $3.24, on revenue of $142.3 million.

At last check AMC Entertainment shares were trading up nearly 8% at $10.63. They closed regular Wednesday trading down 6.2% at $9.85.

At Dec. 31 AMC had been operating 394, or 67%, of its U.S. theaters at capacities of 20% to 40%. In its international business, at year-end it was operating 109, or 30%, of its theaters, again at limited capacities.

In Q4, more than 8 million people entered the company's U.S. and international theaters, the company said.

AMC worked with Clorox  (CLX) , the Oakland, Calif., cleaning-products major, and with current and former faculty at the Harvard University School of Public Health to design cleaning protocols for its theaters. 

On the financial front, since March 2020, AMC said, it has raised about $2.2 billion of cash by selling debt and equity, secured more than $1 billion of concessions from creditors and landlords, raised more than $80 million by selling assets, and saw $600 million of notes convert to equity.

"I am confident that the actions that we have taken have positioned us well to capitalize on pent-up demand for moviegoing as the rollout of vaccines accelerates," Aron said.

AMC shares are one of the issues, like videogame retailer GameStop  (GME) , that have been heavily traded by people participating on the subreddit wallstreetbets.