Paul Dergarabedian, Comscore senior media analyst predicts AMC Entertainment (NYSE:AMC) revenue will soar this summer as the industry begins to take off.
Disney’s “Guardians of the Galaxy Vol. 3” exceeded box office expectations this past weekend, securing $118.4 million domestically to bring its global total to $289.3 million.
IMAX announced it grossed $25 million from the debut — the company’s biggest global opening thus far in 2023.
Those results, on top of Universal’s “The Super Mario Bros. Movie,” which surpassed $500 million domestically, adds to early momentum heading into the summer box office season.
“I think it’s going to rival the pre-pandemic levels for summer box office,” Paul Dergarabedian, Comscore senior media analyst, told Yahoo Finance.
Dergarabedian says that upcoming films like Pixar’s “Elemental,” Disney’s “The Little Mermaid,” Universal’s “Oppenheimer,” and Warner Bros. “Barbie” as just some of the many films that will drive revenue for AMC Entertainment.
“This is just a bevy of riches on the way at the multiplex,” he said.
According to the latest data from Comscore, total domestic box office grosses have hit $2.85 billion so far this year, 23.3% below 2019’s $3.74 billion over that same time period.
The Movie Theatre Industry is Growing
Dergarabedian argues that the industry is heading in the right direction with 30 more wide-release films slated for release this year compared to 2022: “More movies more often is my [mission] statement for the industry for 2023.”
Currently, the box office is on track to finish off 2023 above $9 billion.
“With moviegoers continuing to trend toward premium screens and concessions, it stands to reason that as volume normalizes, theater-level revenue could exceed pre-pandemic levels,” Wedbush analyst Alicia Reese wrote in a note following the report.
But Paul Dergarabedian isn’t the only one predicting strong growth for the movie theatre industry.
Bloomberg says experts are now projecting that ticket sales will be off about 15% from before the pandemic (with 15% less product) and just about every studio is ramping up output.
Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) are also now contributing billions of dollars to the movie theatre industry.
“After years of negotiations and failed experiments, theater chains and movie studios have reached something of a truce.”
CNBC says this is a positive sign for the movie theatre industry, referring to Amazon’s new business venture.
“While a $1 billion annual investment for film development is on the lower end of what major Hollywood studios spend each year, it’s a positive sign for the movie theater business, which has struggled in the wake of the pandemic.”
Apple’s investment is part of the tech company’s efforts to raise its profile in Hollywood and lure subscribers to its streaming service, Apple TV+, Bloomberg reported, citing people familiar with the matter.
AMC CEO Addresses Movie Industry Critics
AMC CEO Adam Aron says “so-called ‘experts’ thinking streaming dooms movie theatres are so fundamentally incorrect.”
“So WRONG. Our problem is major studios released a lot fewer movies in 2021 & 2022 than in pre-pandemic years,” said the CEO.
Wall Street continues to push the short thesis on AMC, failing to acknowledge the fundamental growth of the company over the past two years.
AMC Entertainment beat Wall Street expectations for its first quarter results last Friday.
“Our results for the first quarter of 2023 represent AMC’s strongest first quarter in four full years.
We kicked off 2023 by continuing on our positive glide path to recovery, with more than a 21% growth in total revenues and a $69 million improvement in Adjusted EBITDA compared to the previous year.
This progress is a testament to the ongoing recovery in the industrywide box office, as well as AMC’s enduring commitment to the excellence and innovation as our guests enjoy a superb movie-going experience at our theatres,” said AMC CEO Adam Aron.
“All told, the first quarter North American box office easily surpassed 2022 by some 29%, totaling more than $1.7 billion.
The recovery in the European box office was even stronger in getting to pre-pandemic norms than that in the U.S.
As I have said for years, when our studio partners showcase their magical storytelling, there is robust demand to be realized at AMC theatres both in the U.S. and abroad.
We believe the first quarter of 2023 is just the tip of the iceberg for what’s to come in the remainder of the year.”
AMC stock is up nearly 41% this year-to-date, though heavy dark pool volume continues to suppress actual retail demand from reflecting on the lit exchange.
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