AMC Entertainment Holdings' (NYSE:AMC) second-quarter results, released yesterday, were its worst ever, showing revenue was all but vaporized by the coronavirus pandemic, causing a massive loss for the period.
Yet because it was able to reach an agreement with its lenders and also recently signed an agreement with Comcast's (NASDAQ:CMCSA) film studio Universal Pictures that could fundamentally change the industry, AMC could be in a position to thrive once normalcy returns.
A once-in-a-century event
AMC reported revenue plunged 99% to just $18.9 million compared to $1.5 billion a year ago, resulting in losses of $5.45 per share versus an $0.08 per share profit in 2019. The outcome was much worse than the $4.30 per share loss Wall Street had been expecting, though analysts also expected the theater chain to record revenue of just $8 million.
President and CEO Adam Aron said, "It should be no surprise to anyone that with our operations shut the world over, and almost no revenues coming in the door, this was the most challenging quarter in the 100-year history of AMC."
The theater operator said it had reopened 130 venues in international markets, or about one-third of its total, and it expects all of them to resume operations within the next two to three weeks. In the U.S., two-thirds of its theaters are expected to open later this month.
AMC's deal with Universal will let the studio show its films in its theaters again after a spat erupted over the movie Trolls World Tour going direct to pay-per-view and bypassing theaters in April. In exchange for AMC agreeing to narrow the exclusivity window to just 17 days, the theater operator will receive a portion of the revenue from certain movies that are shown on streaming platforms.