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AMC Stock Pre-Earnings: Pandemic Days Are Over

On March 1, after the closing bell, movie theater company AMC will report its fourth quarter results. Here is what to know ahead of the event.

AMC Entertainment’s earnings are just around the corner. On March 1, after the closing bell, AMC will report its fourth quarter results. As usual, Wall Street Memes will cover the event through its live blog. Stay tuned!

As AMC has already pre-announced, Q4 will be the company's strongest quarter since the start of the pandemic. With the help of its loyal shareholders, AMC managed to raise cash and get through the most difficult period in its history.

AMC stock  (AMC) - Get Free Report price has been moving since January of last year mostly on the back of momentum and sentiment — a.k.a. “meme mania”. Will an earnings beat on Tuesday even matter for AMC shares?

Here is what to know ahead of AMC’s Q4 earnings.

AMC Theater, street view

AMC Theater, street view

Last earnings recap

In Q3, the movie theater operator delivered an all-around beat on revenues of $763 million and net loss per share of 44 cents.

Other key metrics also looked particularly good. First, global attendance nearly doubled from 22 million in Q2 to 40 million three months later. Also, food and beverage revenues jumped more than $100 million sequentially.

Curiously, AMC sold nearly twice as much at the concession stand in Q3 than it did in movie tickets between April and December of last year.

Despite some encouraging numbers in Q3, AMC's management team still warned about the pandemic dragging Q4 results. Still, the company sees adjusted EBITDA and free cash flow turning positive in Q4.

Even though Q3 earnings topped market expectations, AMC shares sank right after the release of the report, finishing the following trading day down an uncomfortable 11%. For the past three months, AMC stock has been down an even worse 43%.

Q4: the strongest quarter in two years

With the pandemic in its final stages and life gradually returning to normal, Q4 of 2021 will likely be a turning point for AMC's business.

The company has already reported preliminary results. Total revenues should land at $1.17 billion compared to $162.5 million in the same period a year earlier. Compared to 2019 levels, the top line should be 19% lower — a win, considering the disruptive COVID-19 crisis.

Also, AMC reported that net loss in Q4 is expected to be between $194.8 million and $114.8 million, including non-cash impairment, compared to net loss of $946.1 million in Q4 last year. Adjusted EBITDA is expected to fall between $146.8 million and $151.8 million — that’s right, a positive number — compared to an EBITDA loss of $327.5 million this time last year.

It will be interesting to see the company's outlook or narrative for Q1. Judging by the recent trends, strong lineup of movies ahead (e.g., Batman, Jurassic World), and strong performance by peer IMAX  (IMAX) - Get Free Report, it is likely that the pandemic headwinds will finally be left behind in 2022. 

Regarding new business developments, CEO Adam Aron may touch upon initiatives like cryptocurrency, partnerships, AMC branded merchandise and popcorn. Any of these could be positive for the company's long-term growth plan.

Should earnings matter for AMC stock?

With AMC having already issued a pre-announcement, don’t expect many surprises related to AMC's financial results. But this is not to say that earnings day will be unimportant.

As a “meme blue chip”, AMC stock price has been driven by other factors that are generally unrelated with business fundamentals. One of them is popularity among retail investors leading to positive sentiment. The earnings report could trigger just that chain of events.

Q4 is shaping up to be the movie theater operator’s best quarter since the start of the pandemic and the "ape" era of loyal support for AMC stock. How will investors react this time?