AMC Entertainment Holdings Inc., the largest movie-theater chain in the world, posted a fourth-quarter loss that was smaller than analysts expected, as cinema reopenings spurred better performance than in the previous period.

- AMC on Wednesday reported an adjusted fourth-quarter loss of US$3.15 a share, compared with the average analyst expectation of a US$3.53 loss. Revenue slumped to US$162.5 million. The company took noncash impairment charges of US$466.1 million.

- The outlook this period is improving: Theaters in the two largest U.S. markets, Los Angeles and New York City, are opening back up, suggesting ticket sales should continue their rise from nearly zero during parts of 2020.

Key Insights

- About 67 per cent of the Leawood, Kansas-based chain’s domestic locations were open as of Dec. 31. Attendance has been limited by capacity restrictions, with many markets requiring the company to cap ticket sales at about 25 per cent of total seats available.

- While Reddit traders have caused AMC’s stock price to soar, analysts have raised concerns that the underlying business of the theater chain remains troubled. The company has raised more than US$1 billion since December, in an effort to avoid bankruptcy, and Wall Street will be looking for information about its cash burn, outstanding rental payments and potential asset sales.

- “Our most important single point of focus, after ensuring a safe and clean environment for our theatre guests and workforce, has been to strengthen AMC’s liquidity profile,” Chief Executive Officer Adam Aron said in a statement. The company has raised about US$2.2 billion from new debt and equity capital since March 2020, he said.

Market Reaction

- AMC shares were up 5.6 per cent in extended trading in New York. They have soared more than 360 per cent so far this year, largely due to “meme” investors who have pumped up the stock.