Published - March 01, 2023 @ 5:47 PM (EET)

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In pre-market trading Wednesday, AMC Entertainment Holdings Inc. (NYSE:AMC) shares dropped 8.5% to $6.53 after the company reported fourth-quarter results underscoring fears that theater-going would not return to pre-pandemic levels soon.

As the rising cost-of-living bites, the world's largest cinema chain operator said revenue for the quarter decreased 15.4% year-over-year to $990.9 million, making it AMC's fourteenth consecutive quarterly loss.

Still, quarterly revenue topped consensus estimates of $978 million. AMC reported a quarterly loss of 14 cents per share, also beating forecasts of 21 cents per share.

CEO COMMENTS

Chief Executive Adam Aron, in a statement, said that during the fourth quarter of 2022, the company reported revenue-per-patron of $19.98, which Aron said was "well above" levels seen before the start of the COVID-19 pandemic three years ago. Aron added that AMC's 2022 results showed it "continued on a multi-year glide path to recovery" and was already seeing a solid start to 2023.

For the full fiscal year, revenue was up 54.7% year-over-year to $3.91 billion. AMC ended the quarter with $842.7 million of available liquidity and debt of $4.95 billion.

Down significantly from the previous quarter's 53.18 million total attendance, AMC reported an audience of 49.58 million and a cash burn rate of $57.5 million.

WHAT ELSE IS HAPPENING

Elsewhere, AMC  sold 207.8 million AMC Preferred Equity Units (APEs) in 2022, a share structure that would convert preferred shares (ticker APE) into AMC common stock.

However, a Delaware court said earlier it would hold a preliminary injunction hearing on April 27, indicating that the highly anticipated conversion may take longer than expected.

JonesTrading's Cabot Henderson, who focuses on merger arbitrage and special situations, said, "The preliminary injunction hearing on April 27 extends the time that investors have to hold long APE/short AMC by at least a month and a half, given the horrifically high cost of borrow this is a painful outcome for arbitragers."