AMC Buyback Helps Soften Blow of Surprise Loss, Dividend Cut
(Bloomberg) -- AMC Entertainment Holdings Inc., the largest U.S. theater chain, posted a fourth-quarter loss, cut executive pay and slashed its dividend by 85%. But the company also announced a $200 million share buyback that lifted the stock in extended trading.
- The fourth-quarter loss amounted to 13 cents a share, Leawood, Kansas-based AMC said Thursday. Analysts were expecting AMC to about break even. The company also reported revenue of $1.45 billion, slightly beating forecasts.
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- AMC, also Europe’s biggest exhibitor, has worked to improve the experience of theatergoers, with reclining seats, alcoholic beverages and bigger screens. Still it faces steep competition from streaming services like Netflix. Domestic attendance slumped 4.4% in the fourth quarter, amid a 1.6% drop in box-office sales industrywide.
- The company, controlled by Chinese billionaire Wang Jianlin, added coronavirus to normal language outlining business risks. The chain has already predicted declining sales in 2020 due to a weaker slate of films.
- In October, AMC introduced an on-demand film service for members of AMC Stubs, its subscription program. It has agreements with all of the large Hollywood studios to offer digital rentals and purchases for home viewing and on digital devices after movies complete their theatrical runs.
- AMC shares rose 12% to $6.80 in extended trading. They have declined 16% this year, most recently on coronavirus fears. They slumped to an all-time low this week as the outbreak worsened.
- For AMC’s stock performance, click here.
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