AMC Theatres lost $561 million in one quarter, with revenue down nearly 100%, because of COVID-19

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AMC Theatres, the world’s largest cinema operator, lost $561 million in its most recent quarter as revenue collapsed because of the COVID-19 panic.

The Leawood, Kan.-based exhibitor, which is owned by China’s Dalian Wanda Group, has been hammered by the coronavirus crisis, which has kept is 630 U.S. theaters closed since mid-March. The company’s revenue was $18.9 million during the three months that ended in June, down 99% from the same period a year ago, the firm said Thursday.

Second quarter earnings were even worse than Wall Street anticipated. AMC lost $5.38 a share, compared to the average $4.34 per-share loss predicted by analysts polled by FactSet.

AMC’s stock was little-changed in after hours trading, after closing at $4.14.

“It should be no surprise to anyone that with our operations shut the world over, and almost no revenues coming in the door, this was the most challenging quarter in the 100-year history of AMC,” said Chief Executive Adam Aron.

The earnings release comes shortly after AMC and Universal Pictures made a historic deal to shorten the theatrical window for certain movies to as little as 17 days, compared to the average 90 days for big Hollywood films. Following the window, Universal can offer its films for $20 rental video on-demand, with AMC will taking a cut of the digital video revenue.

Rivals, including Regal Cinemas’ parent company, Cineworld, have blasted the deal, which they say could undermine the theatrical business. “We do not see any business sense in this model,” said Cineworld CEO Mooky Greidinger in a statement.

Aron said the new model will improve AMC’s business by making sure the company is paid, and by expanding the market for films by making it easier for Universal to make money from its non-blockbuster releases. Better studio profits will lead the the greenlighting of more theatrical films, he argued.

“We now will be cut in, included and paid when Universal movies go to the home early,” Aron said.

During the public health crisis, AMC has moved to improve its balance sheet by restructuring $2.6 billion in debt last month. The company raised $300 million in additional cash in order to help it withstand the shutdowns.

It remains unclear when AMC will be able to fully reopen its circuit in the U.S. Theater owners have been waiting for new Hollywood movies to show before they return to normal business operations. After shifting the release date for “Tenet” multiple times, Warner Bros. recently said it would release the Christopher Nolan film internationally late this month, followed by a staggered domestic release in certain U.S. cities.

Walt Disney Co. on Tuesday stunned the industry by announcing that its live-action film version of “Mulan” would largely skip theaters and be available on streaming service Disney+ for a $30 fee, starting Sept. 4. The movie will play in theaters only in countries where Disney+ is not available and where cinemas are open, the Burbank-based company said.

Aron on a conference call with analysts said that a third of its theaters in Europe and the Middle East are already open and that the vast majority will be open in the next two weeks. Including international theaters, AMC’s worldwide footprint boasts more than 1,000 cinema locations.



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