AMC Entertainment Holdings, the world’s largest theatre chain, reported fourth-quarter earnings that fell short of Wall Street estimates, sending the shares lower.

AMC posted a profit of US$42.5 million before interest, taxes, depreciation and amortisation, according to a statement on Wednesday (Feb 28). That was less than the US$46.7 million analysts were forecasting. The company reported a loss of 54 US cents a share, excluding some items, less than the 67 US cents seen by analysts.

Chief executive officer Adam Aron has lamented the “anaemic” state of the box office in recent months. The company, which carries long-term debt and lease obligations of US$8.7 billion, has skirted insolvency in the wake of the Covid-19 pandemic through share sales and other manoeuvres.

Shares of AMC fell as much as 18 per cent to US$4.10 in extended trading before partly recovering. Fuelled by retail investors at the height of the pandemic, AMC briefly traded over US$450 in June 2021, giving Aron the opportunity to raise money.

S&P Global Ratings has a CCC+ junk designation on AMC, with a negative outlook, reflecting “its substantial debt burden” and expectations that revenue will fall 8 to 9 per cent this year because of a limited slate of film releases from Hollywood studios this year.

Sales for the quarter rose 12 per cent to US$1.1 billion, beating projections of US$1.05 billion.

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The company raised about US$325.5 million through the sale of 40 million shares last September, a move that it said would address a cash crunch as the movie-theatre industry rebounds. BLOOMBERG