AMC Entertainment Holdings Inc., the second-largest U.S. cinema chain, said second-quarter profit dropped 49 percent, the result of shrinking industrywide box-office sales this year.
Net income fell to $31.4 million, or 32 cents a share, from $61.6 million, or 81 cents, a year earlier, the Leawood, Kansas-based company said yesterday in a statement. Analysts had anticipated 29 cents, the average of 10 estimates compiled by Bloomberg. Sales fell 4.7 percent to $726.6 million, compared with estimates of $731.1 million.
Like other exhibitors, AMC confronted a lackluster film slate during the quarter, as Hollywood’s big-screen releases failed to match last year’s record pace. The company predicts industry sales will shrink at a mid-teens percentage rate in the current quarter before improving in the final three months and into 2015.
“Our expectation is that we will perform along those lines or slightly outperform the industry, as is our history,” Gerry Lopez, AMC’s president and chief executive officer, said yesterday in an interview.
The company, which operates about 5,000 screens, is forecasting a return to growth in the fourth quarter for the North American box office, Lopez said, with revenue rising by a low single-digit percentage. As of July 27, U.S. and Canadian ticket sales for the year were down 6.6 percent from a year ago, according to Rentrak Corp.
Lopez also predicted more mergers among cinema chains.
“The ground is fertile,” Lopez said. “This is a down cycle, no mistake about it, but it is a cycle and it will come back up. Capital is available and credit is available and the path to consolidation is well known.”
AMC, which is controlled by China’s Dalian Wanda Group Co., fell 5.4 percent to $21.30 in extended trading yesterday after the announcement. The stock declined 0.3 percent to $22.51 at the New York close and has gained 9.5 percent this year.
Dalian Wanda, led by billionaire Wang Jianlin, purchased the company in 2012 for $2.6 billion including debt. The deal made Wang the largest theater owner in the world. AMC Entertainment sold more than 21 million Class A shares for $18 each in an initial public offering in December.