AMC Entertainment Stock Earnings: Q2 loss lower than expected but preferred shares steal spotlight

• AMC stock beat on Q2 EPS and missed on revenue, both narrowly.
• AMC is unveiling a preferred stock class under the ticker APE as a dividend.
• The cinema operator lost 10.5% after-hours after advancing in four straight sessions.

AMC Entertainment (AMC) did not serve up the long sought-after MOASS: the Mother Of All Short Squeezes with its second-quarter earnings on Thursday night. AMC stock instead lost 10.5% and drifted down to $16.70 after-hours on Thursday after it served up a beat on earnings and a close miss on revenue.

Adjusted earnings per share of $-0.20 beat consensus by 3 cents, and revenue of $1.16 billion narrowly missed Wall Street consensus of $1.18 billion.

Also read: AMC stock extends recovery rally towards $20

AMC stock earnings

AMC Entertainment had a total attendance of 59.1 million worldwide. This was a solid turnout, especially when compared to the 39 million seen in Q1. The always upbeat AMC CEO, Adam Aron, bragged that this was 168% over the same period a year prior, but that span of time was still dealing with covid precautions. The second quarter of 2019, pre-covid, had revenues of $1.51 billion, so AMC still has some work cut out for it to reach pre-pandemic levels.

Adam Aron was right to share the gains made per customer. "At our AMC theatres in the United States, Food & Beverage spending per patron was $7.52 versus $5.58 in the comparable pre-pandemic quarter of 2019, up 34.8%," CEO Aron enthused. "Internationally, F&B revenue per patron in these periods was up 21.5%. Globally, our Other Revenues per patron were $2.01 in Q2 of 2022 versus $1.22 in Q2 of 2019, also up a healthy 64.8%."

One of the more significant parts of the earnings is that, at least momentarily, AMC stopped hemorrhaging cash. "We generated positive operating cash too in the second quarter of 2022 of $52 million," Aron squeaked. "That was a $178 million improvement from the figure of the same quarter a year ago." AMC has burned through nearly $127 million in cash during the period one year ago. AMC had about $1.18 billion in cash at the end of the quarter.

Adjusted EBITDA of $107 million also turned out to be a $258 million improvement YoY.

AMC will be paying out a special dividend that gives existing shareholders of record on August 15 preferred shares with the APE ticker. One preferred share of APE will be given to shareholders for each existing AMC share held. The preferred shares have the same voting rights as AMC.

One wonders if this is a way for Aron and company to dilute a separate ticker to raise equity and pay down debt, which was the strategy that he tried about one year ago. At that time shareholders were strongly against dilution. A company statement said that APE shares may be convertible into AMC shares at a later date if investors approve the move. Is this then a closeted 2-for-1 stock split?

Aron puffed up expectations for the third quarter by saying that July had produced a company record for Food & Beverage segment revenue and that the month saw the highest number of patrons since December 2019. Additionally, he plugged new releases for the fourth quarter like Ticket to Paradise, Amsterdam and A Man Called Otto.

AMC stock forecast

AMC stock made it well above our target of $18.37, tapping out at a Thursday high of $19.75. This was the fourth straight session advance. This was well into the supply range between $19 and $21 that was mentioned earlier this week. This area was difficult to break through back in February.

Now with the share price back below $17 in the premarket, AMC will go searching for support. The 9-day and 21-day moving averages are in league together right around the $15.70 level and so should provide needed support. Below there is the ascending bottom trend line just above $14.

AMC stock daily chart