AMC Entertainment (AMC) shares were active Tuesday after the movie theatre chain posted a huge increase in first quarter ticket sales thanks in part to success of films such as The Batman" and "Spider-Man: No Way Home".
AMC said revenues for the three months ending in March were pegged at $785.7 million, a more than four-fold increase from last year and well ahead of the Street consensus forecast of $743 million. The group also posted a narrower-than-expected first quarter loss of 52 cents per share.
"AMC just put a very big weekend on the books, and we're highly optimistic that it's a harbinger of things to come. And if you want to know what's to come, Top Gun: Maverick, Memorial Day weekend, then Jurassic World Dominion and then more and more and more and more," CEO Adam Aron told investors on a conference call late Monday.
"Our first quarter was encouraging, our liquidity position remains strong, the film slate is compelling and we're playing on the offensive as we grow and diversify our business," he added. "While we're still in a recovery phase, the outlook is positive indeed in our view. Oh, and one last thing: 'Doctor Strange', 'Doctor Strange', 'Doctor Strange', 'Doctor Strange'. Go see it."
AMC shares were marked 2.15% lower in early Tuesday trading to change hands at $12.30 each, a move that would leave the stock with a year-to-date decline of around 53.7%.
"The domestic box office recovery continues to accelerate as the pandemic grip on movie-patrons has diminished and behavior has migrated toward normalization," said Benchmark analyst Mick Hickey, who carries a 'market weight' rating on the stock.
"Box office growth should benefit from virus mitigation, regulatory unlocks, blockbuster films, exclusive film windows, and pent-up demand for out of home experiences," he added. "We anticipate growth should elevate in FY22, with film catalysts including Doctor Strange, Top Gun, Black Panther, and Avatar."
AMC also said it booked a $64 million gain from its 22% stake in Hycroft Mining Holding, the parent company of northern Nevada's 71,000 acre Hycroft mine, which is estimated to have around 15 million ounces of gold.
AMC unveiled the investment in March of this year, just weeks after CFO Sean Goodman said it could "opportunistically pursue value-enhancing initiatives, including those that lead to diversification of our business."
"You do not understand if you do not think we are seeking out new and exciting opportunity," Aron told investors late Monday. "Our Hycroft Mining investment is a perfect example. Some were stunned by our announcement because it did not align with their preconceived notions about AMC or what they thought were our core competencies. But during the pandemic, AMC demonstrated a keen insight into how companies could rescue themselves from liquidity challenges."
AMC, along with noted commodity investor Eric Sprott, purchased a collective $56 million stake in Hycroft Mining Holding in March, as well as the right to appoint a representative on the Hycroft board, in exchange for what it called a "nominal amount" of cash from AMC shareholders.
