AMC Entertainment Holdings Inc. (NYSE: AMC) announced third quarter results with revenue higher than Wall Street estimates.The news from operators of cinemas chain in the U.S. and other countries, acted as the catalyst in rising its shares price nearly 9 percent to $2.34 in November 3 trading.
AMC Entertainment was forced to shut the doors of almost all of its cinemas because of the pandemic. As a result, the company has incurred high costs for maintaining halls and paying workers wages over the past few months. However, about 90 % of American cinemas and about 73% of the foreign network of theaters are already operational in the United States. But there is no filling the halls yet, as authorities have restrictions, and the audience itself is in no rush to go to locations with huge crowds of people. The lacks of movie premieres arealso exerting pressure on the cinema industry, as several studios have stopped filming.
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In the third quarter, attendance at AMC Entertainment cinemas dropped 93 percent, which contributed to a 91 percent decrease in revenue to $120 million.
At the same time, AMC Entertainment struggled to reach the analysts’ forecasts for an adjusted loss for the quarter. The adjusted loss was $5.7 per share, much higher than a loss of $0.55 per share the company had reported in the same quarter a year ago.
AMC Entertainment is increasingly returning to work, while COVID-19’s second wave may lead to the closing of cinemas again. This means that the shares of the company will remain volatile for a long time, as too many variables influence the business including from the decisions of regulatory authorities to the release schedule of premieres.