AMC Q3 FY22 Investment Note
AMC performs better than expected, whereas the cinema chain industry is still under headwinds
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Key Takeaways:
Attitude: AMC's third-quarter results were impacted by a soft industry-wide box office, but encouragingly, the company's overall metrics for both admissions revenue and food & beverage spending remain well. Besides, AMC welcomed more than 53 million guests to its theaters worldwide this quarter, a 33% increase compared to Q3 2021. The CEO, Adam Aron, is confident that AMC Entertainment's recovery is going well.
Guidance: The management of AMC looks forward to a more robust film slate in the fourth quarter of 2022 and 2023, which has already started strong with the release of BLACK ADAM. The CEO also confirms that the advanced bookings for Black Panther 2 are frothy and robust, even causing it to be 2022 's second biggest movie. Moreover, Q4 will continue with James Cameron's "Avatar: The Way of Water" and with Damien Chazelle's "Babylon." Anchored by a strengthening Q4 2022.
AMC expects to return to a positive operating cash generation in Q4. For the full year of 2022, AMC estimates that the domestic box office will have increased almost by 75%. The following year's box office might grow between 15% and 25%. The management believes the availability of APES will help AMC to grow, deliver and raise capital. Taken together, all his actions have allowed AMC to navigate the way through the impact of the COVID pandemic.
New business: AMC announced a partnership with Zoom, to enter into the multibillion-dollar meetings market for corporate and other meetings. Using a Zoom Room at AMC, event organizers can bring together decentralized workforces or customer bases from different markets, but together at the same time for a cohesive, virtual and in-person meeting experience. These special Zoom Rooms at AMC will be available in as many as 17 major cities across the US starting in 2023. AMC already does about $20 million a year of meetings business in one movie theater without Zoom. Additionally, AMC is in the final throes of developing an AMC-branded credit card, which will be launched in Q1 2023.
Capital allocation: Firstly, AMC will maintain sufficient liquidity to manage through the recovery phase of business. Secondly, AMC plans to strengthen the balance sheet by reducing debt and associated interest costs. Besides, investing in the core business to enhance the guest experience. Lastly, AMC will opportunistically pursue enhancement initiatives with value, including those leading to business diversification.
Earnings Q&A
Q: Does AMC plan to revive the Stubs A-List, and make it more relevant as the amount and mix of contents improve? Where might it stand right now?
Adam Aron: The A-List is our subscription program, up to three movies a week for a monthly fixed price between $20 and $25. The program popped up to as much as 15% of our total moviegoing in the United States. We have a similar program called Limitless in the UK and our UCI theaters in Germany. We paused AMC A-List because of the pandemic and cranked it up last year.
We're already back to between 600,000 and 700,000 A-Listers, up from zero during the pause. Depending on the title, we're seeing that 10% to 15% of our total moviegoing comes from A-List members. We intend to be aggressive in the future to continue to attract people to the program.
Q: Would you please update the information on AMC on Demand?
Adam Aron: AMC on Demand, which we introduced several years ago before the pandemic, has always had low usage. While it's an excellent little product, I think our money is better directed elsewhere. And so, the money that we have been investing in growing AMC Theaters on Demand is money, I believe that instead, we ought to be putting in placing a significant number of branded credit cards or taking popcorn to the home popcorn market. So, as we look to 2023, we're going to either phase out AMC Theaters on Demand or alternatively joint venture with another party to offer that capability to our guests, but not necessarily investment spend to build it up ourselves.
Q: Looking into 2023 in the current environment, we're all seeing the impact of inflation on people's daily lives. How is this impacting AMC?
Adam Aron: When you hear inflation statistics being reported nationally, investors should assume that AMC's costs will go up by a similar amount. What is unusual in AMC's case is that because the box office is on a path of recovery, the volumes that we're seeing in our theaters, and the volumes of customers that we're serving are rising dramatically. As a result, we pick up operating efficiencies and increased operating productivity because the number of guests coming into our theaters is rising, essentially because we're spreading our fixed costs over more people. So, we're in the enviable circumstance that we've got a mitigating offset to inflation. The increasing productivity that comes from spreading our fixed cost over a larger customer base is offsetting a big chunk of the inflationary costs.
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Disclaimer
This article is a script from the AMC Q3 FY22 earnings conference call. In order to facilitate reading, we have made appropriate cuts and revisions. Comments above are made available for informational purposes only. Before investing, please consult a licensed professional. Moomoo Inc. ("moomoo") provides mobile and online technology solutions for securities trading. Moomoo is not an investment adviser or a broker-dealer and it provides neither investment or financial advice nor securities trading services. All contents such as comments and links posted or shared by users of the community are opinions of the respective authors only and do not reflect the opinions, views, or positions of moomoo, its affiliates, or any employees of moomoo or its affiliates. Please consult a qualified investment or tax advisor for your personal financial planning and tax situations. Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services available through the moomoo app are offered by Moomoo Financial Inc., a broker-dealer registered with the U.S. Securities and Exchange Commission (SEC) and a member of Financial Industry Regulatory Authority (FINRA)/Securities Investor Protection Corporation (SIPC). In Singapore, investment products and services available through the moomoo app are offered through Moomoo Financial Singapore Pte. Ltd. regulated by the Monetary Authority of Singapore (MAS). Moomoo Financial Singapore Pte. Ltd. is a Capital Markets Services License (License No. CMS101000) holder with the Exempt Financial Adviser Status. This advertisement has not been reviewed by the Monetary Authority of Singapore. In Australia, financial products and services available through the moomoo app are provided by Futu Securities (Australia) Ltd, an Australian Financial Services Licensee (AFSL No. 224663) regulated by the Australian Securities and Investment Commission (ASIC). Please read and understand our Financial Services Guide, Terms and Conditions, Privacy Policy and other disclosure documents which are available on our websites https://www.moomoo.com/au. Moomoo Technologies Inc., Moomoo Financial Inc., Moomoo Financial Singapore Pte. Ltd. and Futu Securities (Australia) Ltd are affiliated companies.
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Milk The Cow : I don't think that AMC is doing that well...
+
?!
), but I don't think that it's wise to buy at such a moment for AMC...
.
However, investing institutions analysts are saying that it is good
Not a comment that most will like to heard (so will just state the minimum
U may wanna look into other discounted big companies stock instead
Milk The Cow Milk The Cow: Unless there is a buyout of AMC or merger, I don't think the stock price should rally by that much
.
70577514 Milk The Cow: zoom calls and gold mine is just few of positives for AMC.I want to know how they keep getting millions of Ftds
矜重的比尔 : After the market closed on Tuesday, AMC Cinema Line Holdings reported losses and revenue for the 12th consecutive quarter, exceeding analysts' expectations and causing the stock price to fall in after-hours trading.
The movie theater chain and meme stock phenomenon reported a net loss of $226.9 million for the third quarter, or a net loss of 22 cents per share, compared to a net loss of $224.2 million, or a net loss of 22 cents per share for the same period last year. On an adjusted basis, AMC reported a net loss of 20 cents per share, better than the adjusted loss of 27 cents per share a year ago. The company has not reported a earnings quarter on a GAAP basis since nearly a year before the outbreak in the second quarter of 2019.
AMC's second-quarter sales were $968.4 million, compared to $763.2 million in the same period last year. Analysts surveyed by FactSet expected sales of $961 million, a net loss of 20 cents per share, and an adjusted net loss of 23 cents per share.
cola1010 : AMC Entertainment reported another quarterly loss on 8/11, despite higher revenue from the previous year, as it spent more on operational costs such as acquisitions, popcorn business, theatre upgrades, and so on.
The world's largest movie theater chain is dealing with massive debt, stock dilution, and a film release schedule devoid of blockbusters. In after-hours trading, the company's stock was down nearly 4%. Following the coronavirus pandemic, audiences have returned to theaters in greater numbers than ever before, spending more money on tickets and popcorn than ever before. Although AMC has a sizable cash reserve, it continues to spend more than it earns each quarter on operations, which include concession costs, film exhibition costs, and rent and overall increase the operation cost.
I still holding some of the AMC stocks, all the best and up to moon please.
anony168 : While the box office is unmistakably on the rise, it's still falling short of pre-pandemic levels. Adding to all that, inflation is ramped up, and interest rates are marching upwards. hence, no buy for me
ahgong : Many of AMC’s struggling competitors will eventually disappear for good. Cinemark and Cineplex are essentially zombie companies – firms that can barely cover interest payments, let alone the principal. And with the former facing bankruptcy, it’s only a matter of time before creditors start liquidating even the things nailed to the ground.
That is leaving AMC Entertainment as one of the few theaters that might survive the crisis.
70570057 : SUCK THAT HF AND STUPID BEARS! YOUR ALL GOING TO GO BANKRUPT, WHILE WE APES GET RICH!
Ixy The Cat : My recommendation to my friends is to avoid $AMC Entertainment(AMC.US)$ like the plague. Earnings this quarter has been mediocre. The company has massive debts, made worse by the high interest rate environment. Inflation is going to hit consumer discretionary spending, so movie watching becomes less important and its doubtful revenue is going to improve. Its one trick pony of issuing $AMC Preferred Equity Unit(APE.US)$ has been a flop imo. From my perspective with no upside potential, there is no logical reason to hold onto this stock. And the mythical MOASS will never happen.
AwesomeNewbie : I will be holding AMC stocks for some time and hopefully it will bounce back to its glorious moment soon. Looking forward
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