(CTN News) – Is this good news for AMC Entertainment (NYSE: AMC) and its army of Apple investors? The movie theater chain reported third-quarter results that were better than expected.
There was a 45% increase in revenue thanks to the success of the “Barbenheimer” movie at the box office. In addition, the company even reported a surprise profit for the quarter.
There is no doubt that the end of the actor’s strike in Hollywood, coming as it has after writers have also agreed to a new contract, has also taken some uncertainty out of the picture.
Investors get bad news from AMC after good earnings
Let me tell you the bad news first. AMC announced Thursday morning that it was planning to sell $350 million in common stock as part of a new share offering it was planning.
It has been reported that AMC investors were more concerned about the potential dilution than the good earnings and the resolution of the entertainment industry’s labor woes. As of 2:30 p.m., the shares of the company have fallen 10%.
As a result of the numerous challenges that the industry faces, AMC has always been a risky stock to invest in. It is becoming more prevalent for people to stay at home and stream binge-worthy TV shows and original movies from Netflix (NASDAQ: NFLX), Disney (NYSE: DIS), Amazon (NASDAQ: AMZN), and other studios on their TVs, laptops, tablets, and smartphones as well.
In addition to disrupting the theater industry in 2020, COVID-19 is also causing cinephiles to not attend as many multiplexes as they did before the pandemic.
In the earnings release, AMC chairman and CEO Adam Aron admitted as much, saying that “attendance at the domestic box office in the quarter was still 16% below comparable levels in the previous quarter.”.
The industry is still optimistic about the future, however. There is no doubt that the success of Barbie and Oppenheimer proves that people are willing to spend a lot of money on theater tickets for the right movies: event-driven stories with top stars in both the lead and supporting roles.
In addition to the blockbuster numbers for Taylor Swift’s movie, The Eras Tour, these numbers also provide a good indication of the fourth quarter’s performance in theaters… and it shows that theaters do not have to rely on Hollywood to attract customers.
As part of her upcoming Renaissance performance film, the music star Beyoncé might also have a positive impact on theaters.