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What Analysts Project for AMC Entertainment’s Q3 EPS

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EPS projections

In the third quarter, analysts expect AMC Entertainment’s (AMC) adjusted EPS to be -$0.47, which is in stark contrast to the adjusted EPS of -$0.33 in the corresponding quarter last year. The company has been managing its costs very aggressively by reducing overhead expenses and operating hours.

As of August 1, AMC Entertainment had ~$44.0 million worth of stock left for repurchase under the authorized $100 million share buyback plan from August 2017. Repurchases should give some cushion to the bottom line amid lower revenue growth on a year-over-year basis. In the third quarter, analysts expect Cinemark Holdings’ (CNK) adjusted EPS to rise 9.1% YoY to $0.36, driven by higher revenue.

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Investment activities

AMC is cutting costs and selling non-core assets to generate funds to be used toward theatre renovations, overseas expansion, and maximizing shareholder wealth. The company has generated $500 million through the sale of non-core assets in the past 11 months versus its target of generating $400 million from the sale of non-core assets over two years. AMC is investing in adding recliners and premium screens to its theatres. Nearly 400 AMC theatres across the globe are expected to be equipped with premium large-format screens by the end of 2018.

The company is on track to renovate 44 theatres and build 16 new theaters this year. By the end of 2018, AMC aims to have over 275 domestic theatres equipped with recliners along with 25–30 international theatres.

Past performance

In the second quarter, AMC Entertainment’s adjusted EPS of $0.17 came in better than analysts’ adjusted EPS estimate of $0.08. It also beat the company’s EPS of -$1.35 reported in the same quarter of 2017. The company reported second-quarter adjusted EBITDA of $244.8 million against its EBITDA of $135.8 million in the same quarter last year. The EBITDA improvement was due to strategic initiatives and cost-control efforts.

AMC’s management expects its adjusted EBITDA in the latter half of the year to either remain flat or increase marginally.

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