Stock Track | AMC Stock Plunges Over 7% as Q3 Earnings Disappoint Amid Headwinds.

AMC Entertainment Holdings Inc. $AMC Entertainment (AMC.US)$ saw its stock tumble by over 7% on November 7, 2024, as the movie theater chain reported lackluster third-quarter financial results and continued to grapple with challenges from macroeconomic headwinds and a lack of major blockbuster releases.

In its Q3 earnings report, AMC disclosed a 4.1% year-over-year decline in revenue to $1.35 billion, missing analysts' expectations of $1.33 billion. The company attributed the revenue drop to an 11.5% fall in attendance at its theaters, which stood at 65 million, compared to 73.6 million in the same period last year.

The lower attendance, coupled with higher interest expenses, led AMC to report a net loss of $20.7 million for the quarter, in contrast to a profit of $12.3 million in Q3 2023. The company's earnings per share of -$0.04 also missed Wall Street's expectations of -$0.07.

AMC's CEO Adam Aron acknowledged the challenges posed by a dearth of major movie releases from Hollywood studios, whose production schedules were disrupted by last year's strikes by actors and writers. However, he expressed optimism about the future, stating that the company expects the industry-wide box office to "markedly rise at year-end and in the next two years."

In addition to the lack of blockbuster releases, AMC's performance was also weighed down by macroeconomic headwinds impacting consumer discretionary spending. With consumers grappling with inflationary pressures and economic uncertainties, AMC management said they would continue to pursue opportunities to retire or purchase outstanding debt to enhance liquidity and maintain cost controls.