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AMC Entertainment (NYSE:AMC), the movie theater chain, reported an unexpected surge in third-quarter earnings on Nov. 8. The company announced that revenues hit $1.41 billion, exceeding Wall Street estimates of $1.26 billion by 11.6%. The 45.2% year-over-year growth was driven by an increase in contribution per patron, and a 38.4% increase in theater attendance.
AMC also surprised on earnings per share (. The theater chain reported EPS of $2.28, a significant improvement over last year’s loss of $2.20 per share, and well ahead of analyst expectations for a loss of 18 cents. .
“For the second consecutive quarter, AMC reported positive net income and we ended the quarter with $730 million of cash,” CEO Adam Aron said in the press release. “This all suggests that we are well underway on our growth path to recovery from the ravages of the COVID pandemic.”
Aron attributes the company’s success to its innovative marketing and pricing strategies that led to an increase in per-patron spending, particularly in its high-margin food and beverage business. Aron also pointed out the strategic closing of low-performing theaters while launching successful new ones as reasons for the outperformance.
Despite the promising quarter, the CEO also addressed forthcoming challenges, particularly striking actors and writers that threaten to impact AMC’s 2024 performance. Urging involved parties to negotiate immediately, Aron emphasized the importance of ending the “months-long disharmony” within the creative community.
The company also warned that attendance at the domestic box office was still 16% below comparable 2019 levels.
AMC’s Q3 release comes amidst a challenging year for the company. Shares of the firm have declined 67%, contrasting against the S&P 500 YTD return of 15.6%.
Nevertheless, AMC’s Q3 financial performance suggests a turnaround could be in the works. Pay close attention.
Thomas Yeung produced this article using data from Thomson Reuters and unique generative AI prompts. These prompts help distill real-time quarterly earnings data and combine it with InvestorPlace.com’s best-in-class analysis. Our readers get a deep dive into financial results at lightning speed. These articles have been reviewed by a human editor prior to publication. To report any concerns or inaccuracies, please contact us at [email protected].