What happened

Shares of AMC Entertainment Holdings (AMC -1.76%) were higher by 1.8% heading into midday trading Monday as investors prepare for the movie theater chain to report second-quarter earnings results after the market closes.

So what

There's reason for optimism among AMC investors as both Cinemark Holdings and Imax reported financial results that beat analyst expectations. While stepping over the pandemic-decimated numbers from a year ago is easy, Wall Street had a much more dour forecast for theater operators than what played out.

Adult and child in movie theater.

Image source: Getty Images.

Even though a number of the quarter's big releases were available for viewing on streaming services, Cinemark, for example, posted revenue that topped analyst estimates by 17%, coming in at $295 million.

AMC Entertainment, as the country's largest theater chain, could post an even greater surprise than its peers. With its bigger footprint, it might have taken in much more revenue than the Street expects.

Now what

Wall Street has a consensus revenue estimate just north of $375 million, which it expects will generate a loss of $0.93 per share. That would compare to just $19 million last year when all of its theaters were closed, but also to $1.5 billion in 2019.

Still, COVID-19 vaccines were still rolling out to much of the public during the quarter and there was initial hesitation about appearing in enclosed public spaces.

It also can't be forgotten that AMC is the premiere meme stock on the market, so its shares are subject to volatility. Yet if the numbers are significantly better than what Wall Street expects it could cause the theater chain's stock to surge. Would that trigger a short squeeze, as many traders hope? Not likely, but it would be sweet vindication for many.