AMC's Reopening Plans Face Reality Check

Earlier this month, AMC Entertainment (NYSE: AMC) announced its plans to reopen virtually all of its 1,000 theaters around the globe in July. This would come four months after the company shut down all of its venues due to COVID-19.

Without movies to show, its revenue for the last two weeks of the first quarter came to a halt. AMC's quarterly generally accepted accounting principles (GAAP) revenue fell by about 22% versus a year ago, from $1.2 billion to $941.5 million. Its loss widened from roughly $130 million to $2.2 billion. With theaters shut for nearly four months, the second quarter's results will feel an even greater impact.

Management's decision to allow people back to patronize its movie theaters should help AMC's third-quarter revenue. However, there are reasons investors should pause before celebrating and jumping in to buy shares.

Source Fool.com