Movie theater stocks receive a bump after record opening for ‘It’

posted by ThrHistoricalSociety on September 14, 2017 at 6:43 am


From Market Watch: “It,” the updated big screen adaptation of Stephen King’s 1980s novel, captivated and terrified audiences this weekend as it reinvigorated a slumping box office.

Pulling in $123.1 million in its opening weekend, “It” set a record for a September debut, far exceeding what Warner Bros. TWX, -0.11% studio execs were hoping for. The film accounted for 80% of the box-office revenue for the weekend’s top 10 films.

Cinema chains have had a rough year, especially during a summer movie season that was the worst in more than a decade.

But in the wake of the record-breaking weekend for “It,” shares of AMC Entertainment Corp. AMC, +3.24% were up close to 8% during intraday trade on Monday, while shares of Regal Entertainment Group RGC, -0.16% and Imax Corp. IMAX, -0.48% were up more than 6%, and Cinemark Holdings Inc. shares CNK, -0.49% were up nearly 6%.

Hollywood analysts and insiders had put a lot of pressure on “It” ahead of its release.

“Yeah, it was nerve wrecking, but we did pull it off,” Warner’s president of domestic distribution, Jeff Goldstein, said. “We blew past everyone’s most presumptuous expectations. The industry really needed this one.”

In the third quarter, box-office revenue is down roughly 19%, compared with the same period last year, which is an improvement of 300 basis points as compared with last weekend, according to MKM Partners analyst Eric Handler.

“Led by the debut from ‘It,’ the stagnant box office experienced a revival which brought consumers back to theaters in droves,” Handler wrote in a note to investors. “We are increasingly optimistic about September’s slate as ‘It’ should have solid carry-over for the next couple of weeks and likely provide a decent bridge leading into the releases of ‘Kingsman’ and ‘The Lego Ninjago Movie’ on Sept. 22.”

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Comments (2)

MPol on November 17, 2017 at 5:42 am

I saw the film “It” in the Somerville Theatre, not far from where I presently live. It was a scary, but very good film, and worth going to see.

zoetmb on March 17, 2018 at 11:22 am

I realize this post is now six months old, but I can’t imagine why one film would raise theater stock prices.

AMC stock was at 35.68 three years ago and as of 3/16/18 close, it’s at 14.2. Regal stock is a bit more stable: it was at 23.64 on 2/1/15 and closed on 3/1/18 at 23.

The largest chain, AMC, had revenues of over $5 billion in 2017, but managed to lose $487 million anyway, although most of that was due to debt, not operations. But on average, they sold only 88 tickets per day, per screen. I don’t see how that’s sustainable. Its parent, Dalan Wanda, is in severe financial trouble. This does not portend well for the future of theaters.

Theaters are ripping out the seats to install lounge seating, which reduces the seat count by half to two-thirds, because no one is supposedly showing up anyway, but I think this is a huge mistake because every time they sell out a show when there is a hit (like Wonder Woman or Black Panther), they’re leaving money on the table. Between closings and lounge seating, NYC has a net loss of 97,000 seats in the last 30 years. It’s lost 23% of the net seating capacity just since December of 2015.

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