Movie theater operator AMC Entertainment (AMC) - Get AMC Entertainment Holdings, Inc. Class A Report will release its Q3 results on November 8, after the closing bell. Wall Street Memes will be following all the action starting at 4 p.m. EST.
Please join us for this event, and refresh your browser regularly after the end of the trading session for real-time updates. Scroll through the different sections below to follow earnings day step-by-step. From bottom to top: (1) earnings expectations; (2) pre-earnings live blog; (3) earnings call's prepared remarks and (4) Q&A.
AMC: Estimates and YTD Stock Performance
Earnings Call: Q&A
6:22 p.m. EST: Thanks for being with Wall Street Memes today for this live blog! Have a great evening.
6:21 p.m. EST: Earnings call is wrapping up! AMC stock is now down -5% in after-hours to just short of $43, and +3% or so for the day (including regular trading hours).
6:18 p.m. EST: Last question from Credit Suisse, first from an analyst. On Q4 expectations, $2 million domestic box office should lead to positive EBITDA and op cash flow. On October attendance numbers, international outperformed domestic by a little relative to 2019 levels. Regarding A-List, member base is 900,000. It has been turned back on in July-August. About two-thirds of subscribers are back and paying, which is better than CEO expected.
6:11 p.m. EST: Question on exclusive theatrical releases. CEO mentions negotiations with movie producers, that $43 billion were sold in movie tickets in 2019, and that the opportunity should not be ignored. He says that he has had success in the talks, including through deals with Universal, Warner Bros and Disney.
6:04 p.m. EST: Question about repayment of debt. CEO says that this is the least of his concerns. He mentions maturities, nothing owed until August 2023. No big debt maturities until 2026. This is enough time for AMC to build its EBITDA back.
6:02 p.m. EST: Question on pay increase for workers. CEO talks about creditors and workers, crediting them for keeping AMC afloat in 2020. Unemployment now at its lowest since the start of the pandemic. CEO looking into raising wages.
5:57 p.m. EST: Question on Europe expansion. CEO reminds that AMC is already the number 1 movie theater operator there, although with different brand names. Still, he considers expanding.
5:55 p.m. EST: Question on a potential AMC credit card. CEO thought a while ago that the idea would be "too small" for AMC, but seems to be reconsidering. Adam mentions how the AMC community has been emotionally invested in the brand, and a card might make sense. Conversations already started with banks.
5:50 p.m. EST: Question on footprint expansion, which regions to open new locations in? I seem to have lost the feed to the call, I will troubleshoot...
5:49 p.m. EST: Question on eSports and gaming. CEO says that this is another idea on the table. He once again mentions GameStop as a potential partner, as he has mentioned in the past.
5:48 p.m. EST: Question on AMC merchandise. I remember this being a question raised last quarter, when the CEO seemed a bit cautious about the logistic challenges. This time, CEO says that he will consider it carefully.
5:46 p.m. EST: Question about NFTs. CEO once again mentions the popularity of this topic. He thinks that launching an AMC NFT is a smart idea. AMC has "commenced discussions" with Hollywood regarding NFTs, but nothing to report today.
5:45 p.m. EST: Question about Shiba Inu, will it be accepted for payment? CEO again mentions all the "buzz" that he has heard about crypto, explaining that AMC's decision to pursue Dogecoin as form of payment was driven by popular demand. Dogecoin should be approved for Q1 of next year. Now, for Shiba Inu, AMC is trying to figure out how to use it next. He reemphasizes that AMC is not keeping crypto in the balance sheet.
5:41 p.m. EST: First question is about popcorn initiative, and if a "golden ticket" would be part of it. CEO says that he reads comments from his shareholders, and finds good ideas there. He says AMC will do it.
Earnings Call: Prepared Remarks
5:39 p.m. EST: Stock down -4.6%. Now, Q&A.
5:38 p.m. EST: Increasing tax burden also a factor in convincing CEO Aron to sell shares now. Transactions to happen in the near future, and to spread out across three months. The CEO mentioned that "fear, uncertainty and doubt" (the famous acronym FUD) could be spread from his decision to sell.
5:34 p.m. EST: CEO wraps up his remarks by talking about his personal stock ownership. Last quarter, he said that he would be selling some for the first time, to align his portfolio with his personal financial goals.
5:33 p.m. EST: AMC stock goes from down -5.5% to down -2.8% after crypto and NFT comments.
5:33 p.m. EST: Timing of crypto and NFT initiative is uncertain.
5:32 p.m. EST: Crypto and NFTs also part of the strategy, including the potential launch of an AMC coin. "This is the 21st century after all", says the CEO.
5:31 p.m. EST: AMC will open kiosk in malls in 2022 to sell products with the AMC brand.
5:30 p.m. EST: Adam talks about how the liquidity can be used to transform the company to something beyond a movie theater operator. He mentions popcorn.
5:28 p.m. EST: CEO is back on, to talk about strategy.
5:27 p.m. EST: Adjusted EBITDA and free cash flow expected to turn positive in Q4. This "soft guidance" is pretty consistent with the pace of recovery.
5:27 p.m. EST: Opened 7 new theaters and closed 4.
5:26 p.m. EST: Deferred rent obligations reduced further.
5:25 p.m. EST: Capital allocation priorities remain the same. Guaranteeing operations is top, while opportunistic acquisitions is last.
5:24 p.m. EST: Now to the balance sheet... CFO reviews liquidity, which we have talked about here before the start of the call.
5:21 p.m. EST: Revenue per patron up substantially from 2019 levels. Spending in food and beverage is credited for performance, which is consistent with Q2 trends.
5:20 p.m. EST: Shares are now down -4.6%. Lowest levels of after-hours action.
5:19 p.m. EST: Cash burn slowing down to $10 million per month, and projected to get better.
5:18 p.m. EST: CFO has the mic now. Message of recovery and path to pre-pandemic levels remains consistent.
5:17 p.m. EST: Maybe CNBC was at least partially right... AMC stock went from trading down -1.6% to down -3.0% as soon as CEO Aron turned more cautious for a minute. Interesting to see.
5:16 p.m. EST: "On the path to recovery and improvement" from the pandemic. But the CEO reminds everyone that "we are not where we want to be".
5:15 p.m. EST: CEO mentions AMC commercials featuring Nicole Kidman. This is part of the company's promotion investments.
5:14 p.m. EST: CEO Aron talks about new individual locations that have been performing well. More asset acquisitions expected.
5:13 p.m. EST: Cryptocurrency, from Bitcoin to Dogecoin, now accepted for gift cards. AMC will expand use to other products.
5:12 p.m. EST: Beyond the numbers, the CEO talks about alternative content (UFC, WWE, pro football); open-caption showtime for the hearing impaired; Thrills & Chills; $5 fan favorites; etc.
5:08 p.m. EST: October attendance was over 70% of 2019 levels. That's a good number! Remember this article from Wall Street Memes?
5:07 p.m. EST: Q1 attendance was only 9% of pre-pandemic levels. Q2 was 23%. Q3 was 46%. Interesting, this last number is about the same as August's reported three months ago.
5:06 p.m. EST: Global attendance of 40 million mentioned. Much larger than 22 million in Q2 or 7 million in Q1. I had mentioned these stats earlier.
5:05 p.m. EST: Reminds that, in Q2, AMC "crushed it". Adam says that Q3 is encouraging again. Attendance, revenues, narrowing losses look good.
5:03 p.m. EST: CEO talks about early 2021 expectations, and that reality has been matching expectations.
5:02 p.m. EST: CEO Aron starts, as shares trade down -2.2% at this moment.
5:00 p.m. EST: And the call has started! Disclosures first... expect to hear from the CEO and CFO before Q&A. Also expect Adam Aron to be very vocal and high-energy, as usual!
4:59 p.m. EST: AMC stock is now down -1.8% in after hours. Let's see if something happens during the call to move the stock in either direction.
4:58 p.m. EST: I am back for the earnings call! You can also listen to it here.
Pre-earnings call live blog
4:52 p.m. EST: The earnings call starts in about 8 minutes... I will go get me some popcorn and will be right back!
4:51 p.m. EST: So, at first glance, AMC's results were pretty good, in my opinion. The company is recovering, maybe even more quickly than most expected. The stock is still roughly flat in after-hours activity, but keep in mind that shares were up some 8% during regular trading.
4:49 p.m. EST: Another fun fact for moviegoers... ever wonder how much you may be overpaying for soda and popcorn at the theater? AMC reported gross margin of 84% in food and beverage! That is: roughly speaking, your $10.00 popcorn costs AMC about $1.60. But of course, it is about the experience, not the food itself.
4:45 p.m. EST: Back to the P&L, food and beverage revenues increased more than $100 million since Q2. Patrons are certainly returning to the theaters, and they are coming even hungrier!
4:42 p.m. EST: Quick fun fact... adjusted EBITDA came within about $5 million of breaking even. This is quite an accomplishment, after the number reached negative $147 million last quarter and $335 million this time last year.
4:41 p.m. EST: The cash position makes one thing even clearer to me... AMC is definitely not a survival story anymore. The company seems to have more cash than it needs, and return to pre-pandemic levels is the goal at this point.
4:39 p.m. EST: A couple more items outside the P&L... free cash flow was a negative $138 million vs. negative $252 million last quarter. The cash burn is slowing down. Total available liquidity has dropped from $2 billion in Q2 to $1.8 billion now, but AMC says that "the company does not anticipate the need to borrow under the revolver lines during the next twelve months."
4:36 p.m. EST: I am not sure that I agree with the below... the CEO seems to be stating what should be obvious to most, in my view, and not before offering words of encouragement about Q4. AMC stock is probably down (after being up) purely due to the expected after-earnings volatility plus some sell-the-news pressures.
4:34 p.m. EST: CNBC has just blamed a "word of caution" from CEO Adam Aron as the reason for mildly bearish reaction to the print... the CEO has written: "even amidst such good news, we are not yet where we want and need to be. We wish to emphasize that no one should have any illusions that there is not more challenge ahead of us still to be met. The virus continues to be with us, we need to sell more tickets in future quarters than we did in the most recent quarter, and Adjusted EBITDA is still well below pre-pandemic levels."
4:32 p.m. EST: International attendance spiked sequentially from 4.3 million in Q2 to 13.3 million in Q3. International is still the smallest piece of AMC's total, at one-third of attendance.
4:29 p.m. EST: AMC now trading flat in after hours... it is hard to justify why the stock spiked +3% only to drop to -2% very quickly and then recover to flat. Numbers seem just fine, at first glance. But this is the nature of a volatile stock like AMC.
4:27 p.m. EST: Words of encouragement from the CEO regarding the balance of 2021: "October theatre admissions revenues were the highest of any month since before the global pandemic forced the closure of our cinemas more than a year and a half ago".
4:25 p.m. EST: More insight from the earnings report: "significant revenue per patron growth [...] combined with our cost control efforts [to generate] financial results that were well ahead of market expectations."
4:24 p.m. EST: Volatility is high! AMC stock turned around and now trades in the red... -2.0% in after hours.
4:22 p.m. EST: CEO Adam Aron credits strong numbers to "an increasingly appealing film slate, rising COVID-19 vaccination counts, [AMC's] commitment to robust health and safety protocols and [AMC's] own greatly increased marketing activity."
4:21 p.m. EST: Sorry, to be more precise... US attendance is 26.7 million, also a decent number.
4:20 p.m. EST: Attendance for the quarter is just about 40 million. This is nearly twice as large as Q3! Good stuff.
4:18 p.m. EST: Revenues $763 million is a nice beat! Net loss of 44 cents is also above expectations.
4:17 p.m. EST: Stock is up nearly +3% after hours! Results must be in!
4:17 p.m. EST: AMC is now in positive territory! Shares on the move!
4:16 p.m. EST: Don't forget to refresh your browser every few minutes for updates... any moment now!
4:14 p.m. EST: AMC stock is down around -1.0% in after-hours trading, but I don't think this has to do with results yet, which are to be reported any moment now.
4:12 p.m. EST: Other stock movers will likely include op metrics like total attendance, which is widely expected to keep improving from 22 million last quarter. Of course, any positive outlook for Q4 and 2022 could also make a difference.
4:10 p.m. EST: Keep the key Q3 benchmarks in mind... consensus is for revenues of $717 million and net loss of $0.54 per share.
4:08 p.m. EST: Back to AMC, and as a reminder, the company tends to release the earnings report around 15-20 minutes after the closing bell. So we are looking at another few minutes.
4:06 p.m. EST: Looking around the "meme-verse", other stocks like GameStop (GME) - Get GameStop Corp. Class A Report and BlackBerry (BB) - Get BlackBerry Limited Report also ended the Monday trading session up more than 2%. Meanwhile, Robinhood (HOOD) - Get Robinhood Report has just reported a data breach issue, and the stock is off around 3% in after-hours.
4:05 p.m. EST: Trading at around $45 per share, AMC is at its high since mid-September. This could be encouraging to bulls, but may also be interpreted as a yellow flag as shares have climbed ahead of earnings and have set the bar higher.
4:03 p.m. EST: AMC stock had an amazing day of trading, up some +8%!
4:00 p.m. EST: ...and the closing bell has rung! Welcome to AMC's Q3 earnings live blog!
Wall Street believes that AMC will deliver revenues of $717 million in the third quarter as a consensus, although the estimate range starts as low as $545 million (see second carrousel image at the beginning of this article).
On loss per share, analysts are expecting to see $0.53 at the average, while the estimate range goes from loss of $0.36 at best to $0.68 at worst. These numbers compare very favorably to a pandemic-stricken third quarter of 2020, when net losses reached a whopping $8.41 per share.
On the main topics of conversation, keep an eye on some key operating metrics. Last quarter, AMC reported attendance of 22 million, much better than Q1's 6.8 million.
On the P&L drivers, I will be curious to see what happens to consolidated ticket price that reached $10.56 last quarter. Will it keep improving? And will elevated concession sales (average $7.32 per patron in Q2) continue to be a positive story this time?
Still on the top line, keep the following benchmarks in mind: 2021 ticket revenues in the US were only 13% of 2019 levels in Q1, but improved to 29% of 2019 levels in Q2. As of early August, the number had climbed to 45% in Q3. Will it end the quarter much higher, suggesting that moviegoers have been returning to the theaters en masse?
The other important topic will be cash management. About three months ago, CEO Adam Aron said that AMC would be cash flow positive by Q4 if the company reached $5.2 billion in annual box office revenues. Let's see how they track.
Lastly, shareholders will probably be curious to hear more about AMC's growth ideas, including how to deploy the $1 billion-plus that the company had on its balance sheet in Q3. Last quarter, the CEO talked about initiatives in crypto; a partnership with GameStop (GME) - Get GameStop Corp. Class A Report; musical, sports and gaming events; among others.
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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)