It is time for AMC to release its second quarter results! This is a pivotal moment for the company, as it tries to recover from a disruptive COVID-19 crisis. Will AMC deliver decent results? And what will happen to AMC stock price?
Wall Street Memes will analyze the results and the conference call. Tune in to our live coverage, which starts at 4 p.m. EST, on August 9. The earnings release should come out a few minutes after the market closes, and the call is scheduled to kick off at 5:00 p.m. ET.
Ahead of earnings, feel free to check out our earnings preview article on thestreet.com/memestocks. Below is a summary of the key topics of conversation. To skip the preview, scroll straight down to the "Live Coverage Starts Here!" section for real time insights.
(Read more from the Wall Street Memes: AMC Stock: Second Quarter 2021 Earnings Preview)
Previewing AMC's Q2 earnings
- Wall Street is expecting net loss per share of $0.94 in the second quarter. For reference, this number compares very favorably to a second quarter of 2020 that was severely impacted by the beginning of the pandemic: net loss of $5.38 per share.
- Consensus revenue of $375 million compares to a reported $19 million in the same quarter last year. Clearly, year-over-year analysis will not mean much this time, since 2020 was deeply shaken by COVID-19 lockdowns and the closing of AMC theaters.
- AMC's CEO has claimed to be focused on the execution of the company's strategies, both operationally and financially. One of the most discussed was the issuance of 11.5 million shares in two separate waves, which generated around $587 million in cash. The capital raise was made possible by meme mania leading to sky-high share price in June. It will be interesting to hear more about cash management throughout AMC's recovery process.
- With vaccination efforts moving forward in the second quarter, the gradual reopening of the economy has been a key factor in AMC’s recovery. However, results are still expected to be far from pre-pandemic levels. For instance, in the second quarter of 2019, AMC reported revenues of $1.5 billion and EPS of $0.17 cents.
- The delta variant has put in question how quickly the COVID-19 pandemic can finally be brought to an end. Will management's tone be positive, as it was on first quarter earnings day, or negative, on the back of the recent spike in cases and additional business restrictions?
Live coverage starts here!
7:30 a.m. EST: Please stand by for our live coverage AMC’s Q2 report! Refresh your browser for updates below, if it does not do so automatically.
12:00 p.m. EST: Hello, all! Quick mid-day update on AMC stock...
12:02 p.m. EST: Shares have been hanging in there on earnings day, now up nearly +2% after dipping into negative territory a couple of times -- but only briefly.
12:06 p.m. EST: I will be back for the closing bell. Expect AMC's Q2 numbers to come out not longer after 4 p.m. EST. See you then!
3:50 p.m. EST: Are you all ready??
3:50 p.m. EST: Wall Street Memes' coverage of AMC's Q2 earnings starts now!
3:51 p.m. EST: Quick share price check... AMC is doing great today, up around +5%! The stock has been on a slow climb all day.
3:52 p.m. EST: A few reminders... AMC's numbers usually drop between 4:15 p.m. and 4:20 p.m. EST. The conference call, which you can listen to here, starts at 5 p.m. EST.
3:55 p.m. EST: Expectations from Wall Street analysts are set at a consensus $382 million in revenues and net loss per share of 96 cents. But keep in mind that only a handful of analysts cover this stock, and that AMC is in the middle of a recovery. So really, anything is possible, including a massive consensus beat.
3:56 p.m. EST: Also, AMC has been the ultimate momentum stock in 2021, so share price reaction may not be fully justified by the results of the quarter alone. Other factors (e.g. market dynamics) will play a role too, I bet.
3:58 p.m. EST: We are only a few minutes away from the closing bell! AMC stock is selling off a bit in the last few seconds. Investors, traders, HODLers and diamond hands should be ready for intense volatility here -- it's what this is all about.
4:00 p.m. EST: And that's it! The closing bell has rung!
4:01 p.m. EST: AMC crossed the finish line this Monday up +3.3%. Expect sharper movements in after-hours trading in the next hour at least.
4:03 p.m. EST: Seeking Alpha reports that box office results this weekend were disappointing, the result of COVID-19 restrictions and the release of Suicide Squad on streaming service platforms.
4:05 p.m. EST: This is probably why Cinemark and IMAX traded so weakly today, down -3% at least. Of course, AMC marches to the beat of its own drum, supported by the ape community.
4:08 p.m. EST: Still on AMC's peers, Cinemark and IMAX are still reporting revenues below half of where they were in 2019. AMC's sales this time is expected to be only about 25% of what they were in Q2 of 2019. Could the bar have been set too low? We'll find out in about 10 minutes.
4:09 p.m. EST: Regardless of Q2 numbers, stay tuned for comments about the second half of the year. Is the delta variant expected to slow down the reopening and recovery substantially? Will the management team be as upbeat as usual?\
4:10 p.m. EST: Meanwhile, AMC is up +1% in after-hours trading! That's a total of over +4% for the day, flat for the past week and down for the past month.
4:14 p.m. EST: Lastly, before we set eyes on the earnings report... will today be the trigger for the anticipated MOASS -- mother of all short squeezes? One thing is for sure: earnings days are catalysts by default, so anything is possible.
4:15 p.m. EST: AMC stock has turned slightly negative in after hours... I don't think this is related to earnings results, the release has not come out yet.
4:18 p.m. EST: Lots of volatility, AMC back in the positive. Any second now!
4:18 p.m. EST: Numbers are in! AMC is up +3%! It's a revenue and earnings beat!
4:20 p.m. EST: Revenues of $444.7M is much higher than consensus. Largest top-line beat of the past five years, at least.
4:20 p.m. EST: Net loss of 71 cents is also better than expectations by nearly a quarter.
4:22 p.m. EST: “The second quarter of 2021 was transformational for AMC", says CEO Adam Aron. He highlights the $1.25 billion in new equity capital raised.
4:23 p.m. EST: More from the press release: "By June 30, substantially all of our theatres were open again to entertain and delight our guests. Thanks to increased vaccination counts in the countries we serve, we started to see rising movie going demand. New blockbuster films released during the quarter drove successive new pandemic-era box office records. And fortunately for us, as guests returned to our theatres, they splurged on our food & beverage offerings, which admittedly is quite a high-margin business."
4:26 p.m. EST: Here's a table with some important P&L, cash flow and operating data:
4:28 p.m. EST: Let's take a look at balance sheet and cash flow. These are still important topics of conversation, at least until AMC is able to climb out of this downcycle.
4:29 p.m. EST: $1.8 billion in cash is much higher than the $800 million or so from the end of last quarter. Of course, this is largely a function of the equity raise during Q2. Debt levels remained relatively steady.
4:32 p.m. EST: Cash used in operating activities was a hefty $234 million, but that is a noticeable improvement from use of $313 million. The cash bleed is slowing down, although not sharply.
4:33 p.m. EST: Another interesting metric: attendance in Q2 was 22 million, way better than last quarter's 6.8 million.
4:35 p.m. EST: Consolidated ticket price of $10.56 is better than last quarter (by a bit) and Q2 of 2020 (by a lot).
4:37 p.m. EST: Average food and beverage revenue per patron of $7.32 is pretty much flat sequentially, but nearly double YOY. Concession sales is something that the management team was very happy about in Q1, they likely will be again in Q2.
4:40 p.m. EST: I think I have seen enough for a quick "first impression" on AMC's results: not bad, given the circumstances. There is clearly lots of work to be done before the company stabilizes (maybe later this year) and returns to growth (likely 2022). But the company seems to be tracking well.
4:40 p.m. EST: The market definitely seems to agree. AMC stock is flirting with +10% in after-hours trading.
4:42 p.m. EST: AMC HODLers must be happy. Results were better than expected and the stock is reacting well. Could bullishness pick up from here and push a few bears out of the trade?
4:44 p.m. EST: As a reminder, the conference call starts in just about 15 minutes. Time for a quick water break, but definitely stick around for more!
4:57 p.m. EST: Ok, we are back! Call starts in a couple minutes. We should hear from CEO Adam Aron first, followed by CFO Sean Goodman. Q&A will be last, and should feature select questions from individual investors as well.
5:00 p.m. EST: A little surprised by price action here... after nearly hitting +10% in after hours, AMC stock is now up a more modest +4%. Let's see if the call does anything meaningful to the price.
5:01 p.m. EST: Call has started! Disclaimers first.
5:02 p.m. EST: CEO Aron is up.
5:03 p.m. EST: Q2 is labeled "considerable progress" towards recovery. CEO Aron teases that he will be sharing something new today. Hmm...
5:05 p.m. EST: CEO seems satisfied by performance, operational and financial. AMC is strongest now than since the start of the pandemic. Liquidity is at a 100-year high.
5:06 p.m. EST: Liquidity has moved from $1 billion last quarter to $2 billion. Last quarter's was already a record high. Major credit to the $1.25 billion raised in equity, minor credit to slower cash burn.
5:07 p.m. EST: "AMC crushed it", says the CEO.
5:08 p.m. EST: Adam praises the increase in average ticket price, plus average food and beverage revenues. Indeed, these numbers were really solid.
5:09 p.m. EST: Ticket revenues in the US was only 13% of 2019 levels in Q1... but 29% of 2019 levels in Q2. Q3? Currently at 45%. Good progress!
5:10 p.m. EST: Market seems to like the call so far, stock up +5% now.
5:10 p.m. EST: Capacity utilization in Q2 and Q3 so far are above 60% (nearly 70% this quarter) of two year-ago levels, pre-COVID. Once again, this sounds pretty decent.
5:12 p.m. EST: Sorry, CEO Aron is going a bit too fast for my fingers on these numbers. But the bottom line is that ticket revenues, capacity utilization, etc. have been improving substantially. Q3 is off to a good start, considering the lingering pandemic.
5:12 p.m. EST: CEO praises the evolution of the vaccination campaigns.
5:14 p.m. EST: If AMC reaches expected $5.2 billion in box office revenues this year, CEO expects company to be cash flow positive by Q4.
5:15 p.m. EST: CEO reminds listeners that debt schedule is favorable, with bulk of liabilities not due until 2026. That's some good runway.
5:16 p.m. EST: CEO sounds confident about the state of the industry. He does not see streaming killing movie theaters. He is optimistic as usual.
5:17 p.m. EST: The CFO is on now.
5:17 p.m. EST: Sean talks about attendance being up substantially sequentially. Right path, although still ways to go.
5:18 p.m. EST: CFO repeats some of the CEO's talk points on average ticket prices and per-patron food and beverage revenues.
5:19 p.m. EST: On balance sheet, $2.0 billion in total liquidity, with $1.8 billion in unrestricted cash. Equity raise was the big factor. $85 million cash burn per month, down from $120 month last quarter.
5:20 p.m. EST: Interesting that lots of the cash burn is a result of interest payments. Ex-interest (i.e. from operations only), cash burn was much closer to zero.
5:21 p.m. EST: CFO lays out initiatives to deploy cash to reduce debt over time. Also mentions closing underperforming locations, and acquiring assets opportunistically.
5:23 p.m. EST: Cash rent paid will be higher in the second half to reduce deferred rent payments. In other words, AMC is focusing on "cleaning up the house" after the pandemic. This is a good sign of confidence in the business.
5:24 p.m. EST: CEO will come back soon to share some news.
5:26 p.m. EST: CEO says "it's time to play offense again". AMC is looking at picking up 10 new locations in markets like LA, Chicago and Atlanta.
5:29 p.m. EST: AMC to continue showing concerts and other events. UFC was first, Chance the Rapper is next. Other sporting events to come, as well as gaming -- a partnership with GameStop was teased.
5:31 p.m. EST: The CEO also unveils the intention to get involved in a SPAC deal in the cryptocurrency world. Also, AMC will accept bitcoin for movie theater and concessions. More details to be shared publicly in the future.
5:32 p.m. EST: Apple Pay and Google Pay introduced as accepted payment methods.
5:34 p.m. EST: CEO Aron is still going with the announcements... lots going on at AMC's HQ. He says that his tweets have been read more than 72 million times. CEO is following more than 2,000 accounts to better understand AMC's shareholders.
5:35 p.m. EST: Adam cites inflation, leading to higher costs but also about 50 cents of ticket price increase.
5:37 p.m. EST: AMC working with Universal and Warner Bros. for exclusive theatrical release windows.
5:40 p.m. EST: CEO Aron pushed for significant insider ownership at his first meeting as chairman of the board of directors, in June. A new policy will be proposed to require ownership of certain amount of shares in AMC from top executives.
5:42 p.m. EST: Adam announces that he could (or will) sell some of his AMC shares in September for diversification purposes, as he reaches 67 years of age. He emphasizes, however, that he has never sold AMC during his tenure so far.
5:44 p.m. EST: The CEO wraps up his prepared remarks.
5:45 p.m. EST: Q&A now. First question is on dividend. Will the company resume payments? CEO Aron says that AMC can not pay a dividend until a year from now. But the management team will consider it, once the time is right. Other priorities must be considered as well.
5:46 p.m. EST: Next question is on gaming, will there be a partnership with GameStop? CEO Aron is interested in it.
5:48 p.m. EST: Next question is on drive-in theaters. CEO Aron says that the economics are not there. Too much real estate required, and the viewing experience is not great. Also, drive-in theaters are very seasonal.
5:50 p.m. EST: Question on COVID-19 surge. Adam mentions the company's cleaning protocols, which have led to zero contamination inside AMC's theaters, to his knowledge. He also hopes that there will not be further COVID-related shutdowns. I like his message: "There is no more important thing that you can do to protect [...] the country as a whole than to get vaccinated."
5:52 p.m. EST: Question on debt reduction without new share issuance. CEO mentions buying back debt at a discount, rental reductions in exchange for cash payments.
5:54 p.m. EST: Question on day-and-date releases. CEO mentions the conversations with studios about exclusive release windows, which he discussed earlier on the call. Commits to being a "bold pioneer" to convince studios to give AMC the movies first.
5:55 p.m. EST: Question on AMC selling merchandise. CEO will look into it, but sees challenges, like inventory.
5:56 p.m. EST: Question on musical events. AMC is already working on it, and considering doing it permanently -- as well as with sports and gaming competitions.
5:58 p.m. EST: Question on dividend comes up again. A fun one also pops up on creating a gorilla mascot for AMC. Adam dodges it.
6:00 p.m. EST: Question on exclusive content creation. CEO Aron says that AMC already has some experience with it, but mentions how risky and capital-intensive movie making can be. He seems to regret the missed chance to issue more stock in June to raise the cash needed to pursue some of these opportunities.
6:01 p.m. EST: Question on viewing parties for live sporting events. CEO seems open to doing it, including college football. Copyright is an issue that needs to be figured out.
6:03 p.m. EST: More idea generation, this time on family dining, laser tagging. It's interesting to see AMC's shareholder base brainstorming business opportunities alongside the CEO. This is definitely a unique earnings call.
6:05 p.m. EST: CEO once again shows some regret for not having raised more cash when he could to explore more business opportunities.
6:08 p.m. EST: Last question, this one from an analyst regarding the pace of recovery to peak attendance and box office. Adam calls this the $64,000 question. But of course, he is optimistic that things will improve. "No one's crystal ball is good enough to know" for sure.
6:09 p.m. EST: We should be wrapping up soon. AMC stock in after hours is still trading about +5%.
6:11 p.m. EST: Last-last question on food and beverages, and whether prices have been raised. CEO says that people are happy and eager to return to theaters, so they are paying for the whole experience. Revenue per patron is up over 40%, which would have been highly unusual pre-pandemic. CEO confirms that prices have been raised, but still more items are being bought.
6:13 p.m. EST: Well, this has been quite an interesting call! AMC did well in Q2, as much as the pandemic would allow it to, and the management team remains highly optimistic. I was encouraged to start hearing plans to deploy cash in the foreseeable future to reduce debt. That's a sign of confidence in the recovery.
6:14 p.m. EST: And that's a wrap for AMC's Q2 earnings call! I hope you have enjoyed our live coverage. Hope to see you back on thestreet.com/memestocks!