This year’s quiet summer movie season left AMC Entertainment high and dry, as the theater chain owner struggled through a second consecutive money-losing quarter — although it managed not to bleed as much cash as analysts expected.
After markets closed Friday, AMC reported $1.18 billion in revenue and a loss of 33 cents a share for the three months ended September 30. That fell well short of the earnings of 31 cents a share the company reported for the same time last year.
Revenue topped last year’s $780 million in the corresponding quarter, thanks to multiple acquisitions in the last year. Analysts had estimated revenue of $1.16 billion and a loss of 36 cents a share.
“We have been predicting weakness in the third quarter industry box office, due to the quantity and subject matter of the films that were scheduled to be released,” AMC President and CEO Adam Aron said in a statement accompanying the earnings. “We, however, remain bullish about the fourth quarter movie slate.”
AMC, which is owned by China’s Dalian Wanda Group, had been on a spending spree over the last few years, scooping up chains in Europe and North America.
But after the company was hammered by a soft second quarter, Aron said “acquisitions are paused” in order to reduce debt on its last earnings call. The company lost nearly $43 million in the third quarter.
The company has tried to diversify from its reliance on blockbusters, making a $20 million bet on virtual reality company Dreamscape Immersive to add more bells and whistles to the theatrical experience.
AMC’s Chinese parent, Wanda, has also been hamstrung by a regulatory crackdown, as the company has sold off dozens of hotels and its theme park business as it looks to reduce its own debt.
And while AMC doesn’t rely on Wanda for funding, earlier this month, Wanda exec Jack Gao stepped down from his position as interim CEO of Wanda-owned Legendary Entertainment and also exited AMC’s board.
And AMC was the theater chain that came out strongest against subscription service MoviePass’s price cut, calling its under-$10 price tag that allows users to see up to one film a day “not in the best interest of moviegoers.”
On AMC’s conference call following the earnings release, Aron said the company was considering an initial public offering of its European theaters on the London Stock Exchange in 2018, where the exhibitor would sell between one-fourth and one-third of its shares to the European public, as a way to give investors a more immediate return on AMC’s expansion strategy.