AMC Jumps as Movie-Theater Operator’s Forecast Beats Expectations

(Bloomberg) -- AMC Entertainment Holdings Inc. rallied after a return of moviegoers and new releases spurred the theater to report preliminary results that topped expectations.

The world's largest movie-theater company expects fourth-quarter revenue of about $1.17 billion, surpassing the average analyst estimate of $1.09 billion. AMC sees adjusted earnings before interest, taxes, depreciation, and amortization to be between $146.8 million to $151.8 million, topping the highest analyst estimate for $137 million, data compiled by Bloomberg show.

The Leawood, Kansas-based company soared as much as 17% before trimming gains to 5% Tuesday. While shares remain up more than 25% over the past year, it has shed nearly three-quarters of its value from a June peak.

The company's total liquidity at the end of the year exceeded $1.8 billion compared with a quarterly cash burn of about $217 million, the statement showed.

AMC delivered a “huge beat” that reaffirmed Benchmark analyst Mike Hickey's view that the domestic box office will bounce back from the pandemic.

Led by movies like “SpiderMan: No Way Home,” AMC was able to cap off 2021 with “the strongest quarter in two years,” Chief Executive Officer Adam Aron said in the statement.

The head of the company has embraced an army of day-trading small investors that fueled the theater chain from the brink of bankruptcy to record highs in 2021. Junk bonds issued by AMC rose in early trading with its 10% notes due in 2026 among the biggest gainers in the high-yield market Tuesday morning.

Gains of other so-called meme stocks were apparent in early trading, with retail-trader favorites like GameStop Corp. climbing after AMC's announcement.

The video-game retailer rose 3.4% as Express Inc. climbed 4.6% and Sundial Growers Inc. gained 3%. The once trendy stocks have stumbled in recent months, with a basket of 37 meme stocks tracked by Bloomberg down 30% since the start of December.