NEW YORK (AP) — Movie theater stocks took a beating Wednesday after AMC Entertainment previewed a grim earnings report. AMC's announcement came amid broader pessimism about what has been a lackluster summer movie season.
AMC shares lost nearly a quarter of their value a day after the company's announcement late Tuesday that its U.S. box office receipts tumbled 4.4 percent in the second quarter.
A disappointing summer at the box office has put pressure on major North American theater chains, which split grosses with Hollywood studios.
Due to dearth of major summer hits outside the likes of "Wonder Woman" and "Guardians of the Galaxy, Vol. 2," summer season box office receipts are running about 8 percent less than last year, according to comScore. Notable flops have included "The Mummy" and the recently released "Valerian and the City of a Thousand Planets."
Some analysts also have a pessimistic outlook for the exhibition business's future due to ever-increasing subscription on-demand offerings and more competition from television. Last year's domestic revenues totaled $11.4 billion, up about 2 percent from 2015.
Other movie theater operators also took a hit Wednesday as shares in Regal Entertainment Group and Cinemark Holdings Inc. both declined about 5 percent.
Leawood, Kansas-based AMC said it expected a loss between $174.5 million and $178.5 million for the quarter ended in June and dialed back expectations for the third quarter.
AMC, the world's largest movie theater chain, said it planned to slash costs by cutting operating hours and staff levels while offering new pricing plans.
AMC shares have lost more than half their value since the beginning of the year.
AMC will release its full second-quarter earnings after the market closes on Monday.
Shares in AMC sank $4.90, or more than 23 percent, to $15.85 in afternoon trading.