AMC Entertainment Holdings (NYSE:AMC) swung to a profit in 3Q as its market share expanded and attendance at its chain of theatres grew.
Net earnings improved by $239.2 million to $12.3 million, compared to a net loss of $226.9 million in Q3 2022 on total revenue of $1.40 billion, a 45.2% year-over-year increase and ahead of the $1.30 billion expected by analysts.
Diluted earnings per share improved by $2.28 to $0.08, compared to a loss of $2.20 in the same year-ago quarter.
The domestic segment's revenue of $1,064 million was driven by better attendance and a 30% increase in per-patron revenue, showcasing the company's strong pricing power. International revenue reached $342 million, with improved attendance and revenue.
AMC's positive free cash flow of $8.4 million marks the first quarter of positivity since 4Q 2021.
AMC CEO Adam Aron called it AMC's most successful third quarter in its 103-year history, surpassing pre-pandemic 2019 results.
The results solidified AMC’s market position and set the stage for a promising 2024, according to Wedbush.
In a note, Wedbush analysts acknowledged AMC's continued market share expansion in 2023, particularly in the wake of the concluded SAG-AFTRA labor strike. The analyst anticipates a 23% increase in the 2023 North American box office over 2022, with AMC poised to maintain or expand its 22% market share.
Despite the positive outlook, Wedbush maintains a NEUTRAL rating and a $11 price target, considering AMC's fully valued shares, heavy debt load, and the absence of dividends.
Following the release of its 3Q earnings, AMC announced it had filed for an offering of up to $350 million.
As a result, shares of AMC fell nearly 10% on Thursday at $9.13.