03:48 PM EDT, 05/09/2024 (MT Newswires) -- AMC Entertainment ( AMC ) "must" conserve cash and cover its interest payments while it reports losses as the business backdrop remains challenging, Wedbush Securities said Thursday.

The movie theater company late Wednesday logged a first-quarter adjusted net loss of $0.78 a share, narrowing from a $1.31 loss a year earlier. The company also posted a loss for the previous three-month period, while its 2023 adjusted per-share loss decreased year over year to $1.90 from $6.95. Its first-quarter revenue fell to $951.4 million from $954.4 million a year earlier.

AMC ended the March quarter with unrestricted cash of $624.2 million, which translates into $188.3 million of net cash used in operating activities for the period, Chief Financial Officer Sean Goodman said on an earnings conference call late Wednesday, according to a Capital IQ transcript.

AMC has paid off roughly $1 billion of long-term debt in the past two years, but still has about $4.5 billion remaining, Chief Executive Adam Aron told analysts. The company is working with lender syndicates to potentially push out its debt maturities from 2026 into "future periods," Aron said. "There's no agreement that's imminent like it's going to be announced in a day or a week, but it has our highest attention."

The company's shareholders continue to "resist" its share buybacks, while its heavy debt load and lack of dividends overshadow AMC's positive factors, Wedbush analysts Alicia Reese, Michael Pachter and Brandon Barron said in a note. AMC can grow its 22.5% market share through its network of premium large-format screens and concert movie distribution while also potentially driving revenue growth from Europe via theater upgrades, the analysts said. "However, it is unlikely to do so until it works through balance sheet right-sizing over the next two years."

The brokerage cut its price target on the AMC stock to $3.50 from $4 while maintaining its neutral rating. The company's shares were down 4.5% in Thursday late-afternoon trade.

AMC's first-quarter domestic revenue fell year over year to $689.1 million from $704.5 million a year earlier, while international sales dropped to $262.3 million from $249.9 million.

Although the box office in the current quarter is expected to be stronger sequentially, it is likely to be affected by the strikes of last year, declining "significantly below" the 2023 second quarter, Aron said on the call. However, the company's review shows that the movies coming out later in 2024, 2025 and 2026 likely suggest that "very good times are ahead" for the movie theater industry, he added.

Price: 3.02, Change: -0.17, Percent Change: -5.33