(Reuters) – AMC Entertainment fell nearly 8% on Thursday as the movie industry continued to reel from the fallout from Hollywood’s twin strikes, prompting the theater chain to post a bigger-than-expected quarterly loss.
A writer’s and actor’s strike has crippled much of the industry, and fewer films have been released after the summer blockbusters “Barbie” and “Oppenheimer.”
The delayed release of the Dune sequel likely contributed to last year’s weak box office revenue.
AMC reported a loss of 83 cents per share in the fourth quarter, while analysts had expected a loss of 70 cents, according to LSEG data. The impact of the strike is expected to remain this year and weigh on earnings in 2024.
Just as adjusted core profits were returning to more acceptable pre-COVID-19 levels in the summer of 2023, the film industry was paralyzed by a debilitating strike, temporarily challenging 2024 AMC profits. CEO Adam Aron said in a post-earnings conference call.
The strike and resulting lack of new content forced studios to try other means of generating income, such as concert-based films.
“AMC’s deals with Beyoncé and Taylor Swift go a long way to healing wounds and opening up a lucrative revenue stream,” said Danny Hewson, head of financial analysis at AJ Bell.
However, rising distribution costs for Swift and Beyoncé’s concert films were a drag on profits.
Domestic box office revenues were down 35% in the fourth quarter compared to pre-pandemic levels in 2019 and 45% in the first two months of the year compared to 2020 levels.
Eric Handler, an analyst at Ross MKM, said that in 2024, “domestic box office revenue is likely to decline by 7% due to Hollywood’s six-month suspension of film production.”
(Reporting by Samrita Arunasalam in Bengaluru; Editing by Anil D’Silva)
