AMC reports improved earnings, remains bullish amid streaming challenge

AMC Entertainment Holdings posted improved fourth-quarter and full-year earnings in 2018, the company reported Thursday.

The Leawood, Kansas-based movie theater operator reported net income of $170.6 million, or $0.43 per share, for the quarter ended Dec. 31. That compared to a net loss of $276.4 million, or $2.14 per share, in the fourth quarter of 2017.

Quarterly revenue decreased 0.2 percent, to $1.41 billion from $1.42 billion, but operating costs and expenses decreased by 1.5 percent.

AMC beat Wall Street expectations for the quarter. The consensus estimate of analysts polled by Zacks Equity Research was revenue of $1.4 billion and earnings of 18 cents per share.

For all of 2018, AMC reported net earnings of $110.1 million, up almost $600 million from a net loss of $487.2 million in 2017. Revenue for the year increased 7.5 percent, to $5.5 billion.

AMC, the world’s largest movie theater operator, is No. 1 or No. 2 in 22 of the 25 largest U.S. markets, according to the company. Its Odeon subsidiary operates AMC in 16 European countries.

Attendance at AMC’s American theaters increased by 5.3 percent for the fourth quarter of 2018 compared to the prior-year quarter, while international attendance dropped 5 percent, the company said.

In June, AMC announced Stubs A-List, a program that lets customers attend three movies per week for a $19.95 monthly subscription fee.

The company saw the first effects of the new program in its fourth-quarter report, AMC President and CEO Adam Aaron said in a conference call. AMC had a goal of 500,000 A-List members in 12 months, and Aron said the company hit that target in four and a half months.

Aron also discussed the positive impact of reclining seating in theaters, saying European theaters with reclining seats saw an average attendance increase of 34 percent during their first year.

Though mobile movie streaming services like Amazon Prime and Netflix pose a threat for movie theaters, Aron said that increased 2018 revenue and earnings are cause for optimism.

“We think it should set to rest once and for all the fallacious argument that movie theaters cannot thrive in an era where ubiquitous content is available in multiple ways including streaming,” Aron said.

Looking forward to 2019, Aron said that he was confident in the company’s performance due to a number of high-profile movies coming to theaters, particularly many family-friendly films that tend to do well both domestically and internationally.

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