Will AMC Entertainment (AMC) Miss Earnings Estimates This Quarter?

AMC Entertainment Holdings, Inc. AMC is set to release its second-quarter 2014 results after the market closes on Jul 30, 2014.

 

In the last quarter, the company delivered a negative 225% earnings surprise with an average negative beat of 101.39% in the last four quarters. Let's see how things are shaping up for this announcement.

 

Factors to Consider This Quarter

 

AMC Entertainment is poised for better financial results, mainly buoyed by hit movie releases this summer. Moreover, strong presence in the U.S. and an innovative market strategy will further drive the company's top line while moving ahead. 

 

However, volatility in the movie industry, increasing maintenance costs and stiff competition from other theatrical and low-cost video streaming companies will continue to hurt the AMC Entertainment's profitability going forward.

 

Earnings Whispers 

 

Our proven model does not conclusively show that AMC Entertainment is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here, as you will see below

 

Negative Zacks ESP: This is because the Most Accurate Estimate is pegged at 28 cents while the Zacks Consensus Estimate is higher at 36 cents. This leads to an ESP of -22.22% for AMC Entertainment.

 

Zacks Rank #4 (Sell): AMC Entertainment's Zacks Rank #4 decreases the predictive power of ESP, we thus caution investors against the stock going into the earnings announcement, as a Zacks Earnings ESP of -22.22% combined with a Zacks Rank #4 lowers the possibility of an earnings surprise.

 

Other Stocks to Consider

 

Here are some other companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.

 

Live Nation Entertainment, Inc. LYV has an earnings ESP of +31.25% and carries a Zacks Rank #3 (Hold).

 

Six Flags Entertainment Corp. SIX has an earnings ESP of +0.65% and a Zacks Rank #3.

 

Digital Cinema Destinations Corp. DCIN has an earnings ESP of +66.67% and a Zacks Rank #3.