AMC Entertainment Group (AMC -3.25%) is scheduled to report fiscal 2022 first-quarter earnings on May 4. The movie theater chain is bouncing back after the coronavirus pandemic forced it to shut its doors to moviegoers. Unsurprisingly, the shutdowns crippled revenue and required emergency measures to keep the company afloat.
Fortunately for shareholders, movie theaters were allowed to reopen, and studios brought blockbusters back to the big screen. Massive hits have helped AMC boost ticket sales and revenue, but will the popular titles be enough to fill AMC's theaters in 2022?
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Hit films are bringing folks back to the big screen
In its most recent quarter, which ended Dec. 31, AMC's revenue exploded to $1.17 billion. That was up from just $162 million during the same quarter in the year prior. The hit Spider-Man: No Way Home earned $1.9 billion in ticket sales at the box office, but bringing folks back to the theater is generally a tough sell for AMC in an era of streaming content.
AMC Revenue (Quarterly) data by YCharts
Domestic ticket sales in the first quarter of 2022 are trending 40% below the levels in 2019, before the outbreak. Fear of contracting a potentially deadly virus gives folks another reason to stay home and watch the content through the many affordable streaming services. That's troubling news for AMC, which reported a net loss of $131 million in the quarter ended Dec. 31.
AMC's first-quarter results will include ticket sales from another blockbuster hit, The Batman. However, the film generated box-office revenue of $760 million, less than half the $1.9 billion of the Spider-Man flick. If AMC could not generate a profit in the quarter that included Spider-Man, it's unlikely to earn a profit in Q1.
Nevertheless, AMC did earn $46.5 million in cash from operations in the fourth quarter. Keeping its head above water may be the best it can aim for right now. According to box-office analysts, movie theater revenue will hit $8 billion in 2022, an improvement from the $4.4 billion in 2020. However, it would still be far below the $11.4 billion in 2019.
AMC EPS Diluted (TTM) data by YCharts
Before the outbreak, AMC had lost money on the bottom line in two out of the three preceding years. Unfortunately, it's going to take more than a few blockbusters to bring AMC over the hump in 2022.
What this could mean for AMC investors
Analysts on Wall Street expect AMC to report revenue of $741.67 million and a loss in earnings per share (EPS) of $0.59. If the company meets those projections, it will represent increases of 383% and 58%, respectively, from the year-ago period.
The company keeps taking steps forward in its recovery from the pandemic. Shareholders can take comfort in the progress on positive cash flow and blockbusters nearing and surpassing $1 billion in ticket sales. That said, it's unclear if the company can ever return to profitability on the bottom line.
