On Wednesday, August 2, AMC Entertainment Holdings’ (NYSE:$AMC) stock dropped to a new all-time low. To no surprise, the plummet comes a day after the Leawood, Kansas-based company previewed less-than impressive Q2 earnings.
Following Tuesday’s closing bell, AMC Entertainment Holdings disclosed that it now expects to post an earnings loss of $1.34 to $1.36 pre share in Q2. What caused these weakened quarterly projections? Many speculate that it’s due to a dismal United States box office.
After bombing in after-hours trading on Tuesday, shares of the movie theater behemoth dropped 26.38% in mid-morning trading on Wednesday. In intraday trading, AMC Entertainment Holdings reached a new 52-week and all-time low of $15.15 per share.
Let’s get into the numbers!
AMC Entertainment Holdings announced that its U.S. box office revenue dropped 4.4% year-over-year. At the same time, overall North American box office revenue dropped 3.3%.
As a result, the movie theater chain now forecasts quarterly revenues between the $1.2 billion and $1.204 billion range. That said, AMC expects to post a net loss of between $178.5 million and $174.5 million. This is compared to earnings of $24.0 million in the 2016 period.
Further, AMC’s updated, 2017 guidance expects total revenues between the range of $5.10 billion and $5.23 billion. The company forecasts a net loss of $150 million to $125 million as well as a loss per diluted share of $1.17 to $0.97.
In addition, AMC reported that it was negatively impacted by a $202.6 million pre-tax impairment charge for its National CineMedia investment. As part of the March settlement agreement for its acquisition of Carmike Cinemas, AMC had to sell 17 theaters.
Aside from a weak Q2 guidance, AMC also faces a possible threat from overseas. For instance, last month, reports surfaced that the Chinese government will be preventing banks from lending money to AMC’s parent company, Dalian Wanda.
All in all, investors need to be watchful, as AMC is scheduled to post its second-quarter earnings on Monday, August 7.
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