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AMC Entertainment (AMC) Q2 Earnings: What to Expect?

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Leisure and recreation services company AMC Entertainment Holdings, Inc. (AMC - Free Report) , is slated to report second-quarter 2016 results on Aug 1, before the opening bell.

Last quarter, the company posted a positive earnings surprise of 28.57%. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters, with an average beat of 0.60%. Let’s see how things are shaping up for this announcement.

AMC ENTERTAINMT Price and EPS Surprise

AMC ENTERTAINMT Price and EPS Surprise | AMC ENTERTAINMT Quote

Factors at Play

AMC Entertainment operates as a theatrical exhibition company primarily in the U.S. and also internationally. It owns or has interests in theatres and screens worldwide. The company actively invests in renovation and refurbishing of multiplexes through enhancements like reclining seats, improved foods and beverages, dine-in theaters and advanced sound and digital equipment.

However, AMC Entertainment’s takeover offer for Carmike Cinemas was recently turned down by the latter’s shareholders. Following this, the acquisition bid was raised 10% to $1.2 billion, which amounts to $33.06 per share.

Being part of the entertainment industry, the company is exposed to macro economic fluctuations.

Earnings Whispers

Our proven model does not conclusively show that AMC Entertainment is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.

Zacks ESP: AMC Entertainment has an earnings ESP of -13.79%. This is because the Most Accurate estimate stands at 25 cents while the Zacks Consensus Estimate is pegged at 29 cents.

Zacks Rank: AMC Entertainment has a Zacks Rank #5 (Strong Sell). Please note that we caution investors against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks to Consider

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

Waters Corporation (WAT - Free Report) , with an earnings ESP of +3.27% and a Zacks Rank #2.

CDK Global, Inc. , with an Earnings ESP of +4.26% and a Zacks Rank #2.

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