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AMC Entertainment (AMC) Lags Q2 Earnings and Revenues

AMC Entertainment Holdings Inc.AMC reported weak financial results in the second quarter of 2016. Both the top and the bottom line lagged the respective Zacks Consensus Estimate.

GAAP net income was $24 million or 24 cents per share compared with $43.9 million or 45 cents per share in the prior-year quarter. Second-quarter earnings per share of 24 cents were well below the Zacks Consensus Estimate of 29 cents.

Quarterly total revenue was $764 million, down 7% year over year and short of the Zacks Consensus Estimate of $775 million. Segment-wise, Admission revenues were $481.2 million, down 9.8% year over year. Food and beverage revenues were $243.5 million, down 2.8% year over year. Other theater revenues were $39.2 million, up 5.4% year over year.

Quarterly operating expenses were $708.4 million, down 2.6% year over year. Operating income was $55.6 million, down a whopping 41% year over year. Operating margin declined to 7.3% from 11.5% in the year-ago quarter. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was $129.6 million, down 17.9% year over year. Adjusted EBITDA margin was 17% compared with 19.2% in the year-ago quarter.

AMC ENTERTAINMT Price, Consensus and EPS Surprise

AMC ENTERTAINMT Price, Consensus and EPS Surprise | AMC ENTERTAINMT Quote

Operational Metrics

In the second quarter of 2016, average ticket price was $9.63 compared with $9.91 for the same period a year ago. Food and beverage revenues per patron increased 4.7% year over year to an all-time high of $4.87. Average screens for continuing operations were 5,282, up 6.9% year over year. Total number of screens operated was 5,334, up 6%. Total number of theaters operated was 386, up 10.3%. Screens per theater were 13.8 compared with 14.4 in the prior-year quarter.

Cash Flow

During the second quarter of 2016, AMC Entertainment generated $111.1 million of cash from operations compared with $171.4 million in the year-ago quarter. Adjusted free cash flow was $40.8 million compared with $68.7 million in the prior-year quarter.

Liquidity

At the end of the second quarter of 2016, AMC Entertainment had $93.3 million of cash and cash equivalents and $1,835 million of outstanding debt compared with $211.3 million of cash and cash equivalents and $1,912.8 million of outstanding debt at the end of 2015. The debt-to-capitalization ratio, at second-quarter 2016 end, was 0.54 versus 0.55 at the end of 2015.

Zacks Rank & Stocks to Consider

AMC Entertainment currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the same industry are Diamond Resorts International Inc. DRII , CBS Corp. CBS and Vail Resorts Inc. MTN . All three stocks currently carry a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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