AMC is Missing on Earnings - What Happened?

TL;DR

AMC missed earnings because it lost 20 cents per share against an expected loss of 19 cents, even as revenue reached 1.17 billion versus the expected 1.16 billion. Its shares then fell 4% after hours, a reaction the speakers use to illustrate short-term market irrationality while stressing that they are not endorsing AMC as an investment. Read on for the earnings math, recovery context, and long-term theater question.

Transcript

amc just reported this is the hype stock the wall street bets the whole thing they were expected to lose 19 cents per share they lost 20 cents per share they were expected to do 1.16 billion in revenue they beat with 1.17 billion in revenue so seth let's go to our software here and see how amc is doing after hours but we have live no oh my god they... Read More

Key Insights

• 🙂 AMC's earnings slightly missed expectations by one penny per share, leading to concerns among investors.
• 💦 The stock dropped 4% in after-hours trading, demonstrating the irrationality of the market.
• 🎭 AMC's revenue has been recovering, but there are concerns about the future of theaters.
• 💓 Despite the miss in earnings, AMC beat revenue estimates by $10 million.
• 🪡 The market's reaction to AMC's earnings highlights the need for investors to focus on rational analysis rather than hype.
• ⏳ AMC's stock price has experienced significant volatility, with a low of $2 a share and a high of $65 a share in recent times.
• 🉐 The company issued more shares to take advantage of the surge in interest, which diluted the value of existing shares.

Questions & Answers

Q: Why did AMC miss earnings, and what happened to its stock afterward?

AMC was expected to lose 19 cents per share but lost 20 cents per share, missing the expectation by one penny. Its stock then fell 4% in after-hours trading.

Q: Did AMC beat its revenue estimate?

Yes. AMC reported 1.17 billion in revenue compared with an expectation of 1.16 billion, beating the estimate by 10 million.

Q: How large was AMC's earnings miss across all outstanding shares?

The speakers cite 515 million shares outstanding and a miss of one penny per share. They estimate that this amounts to about five million dollars.

Q: What did the earnings miss represent per theater?

Using a thousand theaters, the speakers calculate that the miss was about 55 per theater per day in profit for the quarter. They characterize that amount as roughly the profit from two large popcorns.

Q: Why do the speakers call the market's reaction irrational?

They contrast AMC's one-penny-per-share earnings miss and 10 million revenue beat with the stock's 4% after-hours decline. In their view, that disconnect shows that the market can react irrationally in the short run.

Q: Were AMC's earnings expectations consistent before the report?

No. The transcript says the expected loss was 27 cents per share hours before the announcement, then changed to 23 cents and later 19 cents on the same Twitter account the speakers followed.

Q: Was AMC's revenue recovering?

The speakers say AMC had previously generated 5 billion in revenue and reported 1.16 billion for the latest quarter discussed. They say extrapolating that quarter would equal more than four and a half billion dollars annually, suggesting the business was making its way back after revenue fell sharply during COVID.

Q: What is the key long-term question for AMC investors?

The central question is whether movie theaters will remain places people continue to visit over the long term. The speakers acknowledge that watching new movies has changed and may not be as theater-dependent as it was 30 years ago, but they do not claim theaters will disappear.

Summary & Key Takeaways

• AMC missed earnings expectations by one penny per share, resulting in a $5 million loss when multiplied by the number of shares outstanding.

• The company beat revenue estimates by $10 million, equating to $55 per theater per day in profit.

• Despite the slight miss in earnings, AMC's revenue has been recovering, though there are concerns about the future of theaters.