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A Look at AMC Entertainment’s Bottom-Line Trends

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The first three quarters of 2018

In the last 11 quarters, AMC Entertainment (AMC) has bested analysts’ EPS estimates six times. In the first two quarters of this year, AMC’s adjusted EPS beat estimates and improved YoY (year-over-year). In the third quarter, the company’s EPS were -$0.82, missing analysts’ estimate of -$0.47 and falling YoY from -$0.33 due to increased costs and lower revenue.

Analysts forecast AMC’s adjusted EPS to fall 46.2% YoY to $0.14 in the fourth quarter but improve YoY in fiscal 2018 to -$0.26 from -$1.38. In comparison, analysts expect Cinemark’s (CNK) adjusted EPS to fall 47.6% YoY to $0.43 in the fourth quarter, and fall YoY in fiscal 2018 to $2.10 from $2.26.

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AMC’s costs and EBITDA

AMC’s costs have been rising. In the first three quarters of this year, its operating costs rose 3.8%, 10.7%, and 5.1%, respectively, due to higher operating, food, beverage, and film exhibition costs.

Although AMC’s revenue growth improved its EBITDA and operating profit YoY in the first two quarters, its operating loss expanded YoY in the third quarter, to $21.9 million from $4.1 million. During the third quarter, its adjusted EBITDA fell YoY to $142.4 million from $147.4 million due to its Stubs A-List launch, which could continue to impact its adjusted EBITDA in the fourth quarter. However, due to Stubs A-List’s growing number of subscribers, AMC now expects the program to become accretive to its EBITDA in 2019. It had previously projected 2019 to be a break-even year for the program. 

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