AMC Entertainment (AMC) Reports Q3 Loss, Beats Revenue Estimates – November 8, 2022

AMC Entertainment (AMC Free Report) came out with a quarterly loss of $0.20 per share versus the Zacks Consensus estimate of a loss of $0.25. That compares to a loss of $0.44 per share a year ago. These figures are adjusted for one-off effects.

This quarterly report represents an earnings surprise of 20%. A quarter ago, this cinema operator was expected to post a loss of $0.27 per share when it actually posted a loss of $0.24, a surprise of $11.11 % delivered.

In the past four quarters, the company has beaten consensus EPS estimates four times.

AMC entertainment, part of the Zacks Leisure and Recreation Services industry, had revenue of $968.4 million for the quarter ended September 2022, beating Zacks’ consensus estimate by 0.15%. This compares to annual sales of $763.2 million. The company has beaten consensus sales estimates twice in the past four quarters.

The sustainability of the immediate price action of the stock based on recently released numbers and future earnings expectations will depend primarily on management’s comments on the earnings release.

AMC Entertainment shares are down about 80.4% year-to-date, while the S&P 500 is down -20.1%.

What’s next for AMC Entertainment?

While AMC Entertainment has underperformed the market so far this year, the question for investors is: What’s next for the stock?

There are no easy answers to this key question, but one reliable metric that can help investors answer this question is the company’s earnings prospects. This includes not only the current consensus earnings expectations for the quarter(s) ahead, but also how those expectations have changed recently.

Empirical research shows a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track such revisions themselves or rely on a trusted rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the trend in estimate revisions for AMC Entertainment is mixed. While the magnitude and direction of the estimate revisions could change following the company’s just-released earnings report, the current status puts the stock at a Zacks #3 rank (Hold). The shares are therefore expected to perform in line with the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the coming quarters and the current fiscal year change over the coming days. Current consensus EPS estimate is -$0.14 on sales of $1.21 billion for the upcoming quarter and -$0.82 on sales of $4.13 billion for the current fiscal year.

Investors should keep in mind that the outlook for the industry can also have a material impact on the stock’s performance. In terms of Zacks industry ranking, Leisure and Recreation Services is currently in the bottom 49% of the 250+ Zacks industries. Our research shows that the top 50% of industries evaluated by Zacks outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the same industry, Six Flags (SIX Free Report) is yet to report results for the quarter ended September 2022. The results are expected to be released on November 10th.

This amusement park operator is expected to report quarterly earnings of $1.68 per share in its upcoming report, a -6.7% year-over-year change. Consensus EPS estimate for the quarter has been revised down 2.5% over the last 30 days to current levels.

Six Flags revenue is expected to be $565.4 million, down 11.4% from the year-ago quarter.


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