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AMC Entertainment’s shares rose 4% in expanded trading on Monday after the company posted a smaller-than-expected loss in the second quarter.

Though the cinema operator’s CEO warned the company still faces challenges, he said it could make a profit as early as the fourth quarter if the domestic box office hits at least $ 5.2 billion.

“AMC’s journey through this pandemic is ongoing and we are not out of the woods yet,” CEO Adam Aron said in a statement Monday. “While there are no guarantees of what the future will bring in a still infectious world, one can imagine a happy Hollywood ending to this story.”

Aron made a number of announcements during Monday’s conference call, many of which directly addressed the desires of his new investors, including new payment options like Bitcoin and a wider variety of content offerings like sports and recorded concerts.

Last year, AMC’s cinemas were closed for months due to the coronavirus pandemic. Theaters started reopening late last summer just to see Covid cases rise again and film studios postpone new releases again.

At the end of June, all of AMC’s 593 US theaters were open to the public and 335 of its international theaters, or approximately 95%, were operational. The crowd is returning, but the crowd has not yet recovered to pre-pandemic levels.

According to the AMC, 22 million guests visited its theaters in the second quarter. That was an increase from the 7 million guests who returned to theaters in the first quarter, but it was far from normal. In the second quarter of 2019, AMC sold 97 million tickets, which was a historic quarterly record.

“We’re not driving a winning lap … We’re still losing money, we’re still burning money,” said Aron during a phone call on Monday. “But we can see a light at the end of the tunnel.”

Loss in the second quarter diminishes

Here’s what the company said, relative to Wall Street expectations, based on an analyst survey by Refinitiv:

• Loss per share: 71 cents vs. 91 cents expected
• Revenue: Expected $ 444.7 million versus $ 382.1 million

For the second quarter, AMC recorded a net loss of $ 344 million, or 71 cents per share, compared to a loss of $ 561.2 million, or $ 5.38 per share, a year earlier. According to Refinitiv, analysts had expected a loss of 91 cents per share.

The cinema chain reported revenues of $ 444.7 million, more than analysts’ expectations of $ 382.1 million.

Aron announced that in late 2020, the company with Warner Bros. decided that Warner Bros. would release all of its 2021 films in theaters and through its HBO Max streaming service on the same day.

Exclusive content in theaters can help AMC to become profitable again.

These deals are particularly welcome at a time when the US is recording an average of more than 100,000 new Covid-19 cases per day for the first time since February. The highly contagious Delta variant triggers a resurgence of the virus, especially in unvaccinated populations.

Fears of closings re-emerge as many local governments have chosen to restore mask mandates. Some companies even ask their customers for proof of vaccination before it is delivered to them.

The AMC Burbank 16 and the bronze Batman statue in Downtown Burbank.

AaronP / Bauer-Griffin | GC images | Getty Images

Bring money to work

As of June 30, AMC had approximately $ 1.8 billion in cash and approximately $ 2 billion in liquidity, the company said.

AMC was able to avoid bankruptcy when its cinemas closed because it was able to raise cash in part from a “meme-share” madness. For months, fans of the stock who call themselves “monkeys” have helped propel the stock to record highs. These new investors stayed bullish on traditionally heavily short stocks like AMC and used their growing numbers to make waves on Wall Street.

Thanks to millions of these retail investors, the company’s shares have risen nearly 1,500% since January. However, the stock, which closed at $ 33.80 on Monday, has been halved from its high of $ 72.62 in early June.

AMC begins to put the money raised into work by buying or renting new theaters and upgrading its existing locations with better seating and amenities.

In the second quarter, the company took out leases for two locations in Los Angeles: the 14-screen cinema in The Grove shopping complex in Fairfax and the 18-screen cinema in the Americana at Brand in Glendale. Both were previously operated by Pacific Theaters and are owned by real estate company Caruso. AMC did not disclose the terms of the lease.

In 2018, The Grove Theater was the second highest grossing theater and Americana was the fifth highest grossing theater in the Los Angeles area. AMC is expected to reopen these theaters in August.

On Monday, Aron said the company was in the process of signing leases for up to 10 additional locations. Leases or letters of intent have so far been signed for six cinemas, he said. The theaters are located in Los Angeles, Chicago, and Atlanta. Four other locations are under discussion, he said. Eight of the 10 possible locations are former Arclight and Pacific theaters.

Aron also announced that AMC plans by the end of the year to have technology in place to accept bitcoin for movie tickets and concessions when paid for online.

Reveals Executive Share Ownership Proposal

To further underscore his commitment to the company and its new investors, Aron said he proposed a new stock requirement for top management positions at AMC. The recommendation, which will be discussed during the next board meeting, states that the CEO must hold a share value of eight years’ salary.

In Aron’s case, that would be roughly $ 12 million in shares that are either owned or granted by the company.

Under the proposal, he said, the chief financial officer would have to hold the salary for six years, the executive vice president position would hold the salary for four years, and a senior vice president would have to hold the salary for two years.

“At the same time, as I emphasize ownership, I would like to remind you that in the five full years that I have run this company, I have not sold any AMC stock, even though it was more than three-fifths of my annual salary,” said Aron.

The Tesla logo on a Supercharger fast charging station for the electric vehicle manufacturer Tesla Motors.

SOPA pictures | LightRakete | Getty Images

Check out the companies that are making the headlines in midday trading.

Diamondback Energy – The exploration and production company’s shares were down 3.5% on a 3.5% decline in oil prices. At one point on Monday, West Texas Intermediate crude oil futures, the US oil benchmark, fell more than 4%. Occidental was down almost 3%. NOV and Pioneer Natural Resources both fell about 2%. Schlumberger and Devon Energy each lost more than 1%.

Tesla – Electric vehicle shares rose 2.1% after Jefferies upgraded the company to buy off hold. The Wall Street firm said Tesla was “a leader in earnings momentum and capital allocation.” Jefferies raised its price target from $ 700 to $ 850 per share.

Coinbase – Cryptocurrency exchange stocks rose 8.6% ahead of the quarterly earnings report released Tuesday. With Coinbase generating most of its revenue from trading, its share price is closely tied to Bitcoin price, which hit $ 46,000 on Monday for the first time since May and broke its 200-day moving average.

Robinhood – The shares of the newly public online brokerage rose 3.3% on Monday. Robinhood stock has been volatile since going public and has received a great deal of attention from individual investors.

Tyson Foods – Tyson Foods shares rose 8.7% after the beef and poultry producer released a better-than-expected quarterly earnings report. The company posted quarterly earnings of $ 2.70 per share, well above the consensus estimate of $ 1.62 per share, according to Refinitiv.

Sanderson Farms – Shares in Sanderson Farms rose 7.4% after the poultry producer announced it would be acquired by private food maker Cargill and agricultural investment firm Continental Grain for $ 203 per share. The cash deal corresponds to a premium of 11.3% compared to the closing price of the share on Friday.

Victoria’s Secret – Victoria’s Secret stocks rose about 20% after JPMorgan Chase initiated coverage of the lingerie retailer with an overweight position. The company said the current price of the stock was a “compelling entry point” and found the company to be the leading market share player in the lingerie category.

Darden Restaurants – The restaurant company’s shares fell 4.5% after Evercore ISI downgraded the stock from outperformance to in line. The company issued a statement to its customers that inflation, including rising wages, will hurt the stock as the economy reboots.

– CNBC’s Tanaya Macheel, Maggie Fitzgerald, Jesse Pound and Yun Li contributed to the coverage

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United Airlines ramp services worker John Dalessandro receives a COVID-19 vaccine at United’s onsite clinic at O’Hare International Airport on March 09, 2021 in Chicago, Illinois.

Scott Olson | Getty Images

The U.S. government may not require that everyone get Covid-19 vaccines, but large employers across corporate America are stepping into the void.

More than a dozen large U.S. corporations, including Walmart, Google, Tyson Foods and United Airlines, have recently announced vaccine mandates for some or all of their workers.

“With rapidly rising COVID-19 case counts of contagious, dangerous variants leading to increasing rates of severe illness and hospitalization among the U.S. unvaccinated population, this is the right time to take the next step to ensure a fully vaccinated workforce,” Dr. Claudia Coplein, Tyson’s chief medical officer, said in a statement Tuesday.

The U.S. reported a seven-day average of more than 108,600 new cases per day as of Sunday, up 36% from a week earlier, according to data from Johns Hopkins University. With 83% of sequenced coronavirus cases nationwide stemming from the delta variant, according to Centers for Disease Control and Prevention estimates, vaccinations are seen by health officials and corporate management as the safest way to get employees who have been working remotely back to the office.

Though some employers now unilaterally mandate vaccines, most have limited the scope of their guidance to certain offices or specific groups of workers.

Google and Facebook have mandated Covid immunizations for anyone returning to their U.S. offices. Walmart, which has 1.6 million U.S. employees, has imposed a vaccine mandate for all corporate and management staff, while store employees must wear masks in high-risk counties.

Walmart CEO Doug McMillon outlined the retailer’s plans to keep “gradually coming back into our office spaces with the idea of being closer to pre-pandemic levels after Labor Day.”

In April 2020, a Gallup poll found that 70% of employees surveyed were working from home. Companies are attempting to bring their workforce back into the office, but some have already begun pushing back their return dates as Covid case counts surge. Late last month, Google postponed its return to office deadline to Oct. 18, a delay of more than a month.

“Although I’m not a big fan of mandates, we need to use a variety of incentives to encourage as many people as possible to practice effective infection control,” said Dr. Stephen Morse, a professor of epidemiology at the Columbia University Irving Medical Center. “If that’s the best or only way to motivate some people, then that’s one tool in our toolbox.”

United Airlines said Friday that all of its roughly 67,000-person U.S. employees must provide proof that they are vaccinated against Covid no later than Oct. 25, becoming the country’s first major airline to issue such a mandate. Employees risk termination if they don’t comply, though United said there will be exemptions for religious or medical reasons.

“We know some of you will disagree with this decision to require the vaccine for all United employees,” United Airlines’ CEO Scott Kirby and the airline’s president, Brett Hart, wrote to employees announcing the vaccine requirement. “But, we have no greater responsibility to you and your colleagues than to ensure your safety when you’re at work, and the facts are crystal clear: everyone is safer when everyone is vaccinated.”

Budget carrier Frontier Airlines followed suit hours later with its own mandate but said employees either need to show proof of inoculation by Oct. 1 or take regular Covid tests.

For better or worse, vaccines and other tools to fight the virus such as masks, have become controversial in the U.S. But health officials say the measures are necessary to save lives.

“To leave it up to the individual is to say that there are people who are going to make a choice that puts co-workers at risk,” said Dr. Paul Offit, an infectious disease physician at the Children’s Hospital of Philadelphia. “So I think it’s a responsible, important, necessary thing to do.”

Even companies with the most expansive mandates are required by law to allow some exceptions.

Facebook’s vice president of people, Lori Goler, said the company of nearly 59,000 global employees will have a process in place for people who can’t be vaccinated for medical or other reasons and that it’s working with experts “to ensure our return to office plans prioritize everyone’s health and safety.”

The Alphabet Workers Union, which represents over 800 employees across Google and its parent company, expressed concern over the exceptions to Google’s vaccine mandate, saying the company has provided insufficient details surrounding the exemption process. A spokesperson for the union said the mandate exists “to convince white collar workers to come back to the office,” while “a boatload of people” remain unvaccinated.

Google did not respond to a request for comment. Alphabet employed over 135,000 employees worldwide as of last year.

Other companies have faced pushback from unions on their vaccine directives. After Tyson announced last week that all 120,000 of its office and plant personnel must get vaccinated, United Food and Commercial Workers, which represents 24,000 Tyson meatpacking workers, voiced reservations about mandating vaccines that lack the FDA’s full approval.

“UFCW will be meeting with Tyson in the coming weeks to discuss this vaccine mandate and to ensure that the rights of these workers are protected, and this policy is fairly implemented,” UFCW International President Marc Perrone said in a statement. Perrone added that he wanted to ensure Tyson’s union workers receive paid time off to receive and adjust to the vaccine.

United and its pilots’ union, the Air Line Pilots Association, agreed earlier this year not to implement a vaccine mandate for its nearly 13,000 aviators. United offered extra pay to pilots who received the vaccine and up to three days off for flight attendants. More than 90% of the pilots and about 80% of flight attendants are inoculated, the company said. The union said that some aviators who don’t plan to get vaccinated should talk with their pilot chief.

“The vaccine requirement represents an employment change we believe warrants further negotiations to ensure our safety, welfare, and bargaining rights are maintained, the pilots union said.

Other airlines including American, Southwest and Delta said they have not made any changes to their policies to encourage, but not mandate, vaccines for their employees. In May, Delta was the first major carrier to require the vaccine for new employees. United had followed suit. American and Delta have offered incentives like extra time off for employees who get vaccinated. Delta says more than 73% of its staff is vaccinated.

When asked how it would react to a potential companywide requirement, Dennis Tajer, a spokesman for the Allied Pilots Association, which represents some 15,000 pilots at American, said: “Our position is it’s a personal choice between pilots and their medical professional. As the bargaining agent for the pilots, any change to the conditions of employment must be discussed with the representative union.” The union last week, however, urged pilots to get vaccinated and estimated in a staff note that about 60% of them are inoculated.

By mandating inoculations, corporate America is taking action in a way federal legislators cannot, said Dorit Reiss, a professor at UC Hastings College of the Law. Outside of requiring vaccines for its own employees, Reiss said the federal government “probably doesn’t have the power to say everybody in the U.S. has to get vaccinated or pay a fine.”  

But insurance agencies might, a recent op-ed by Dr. Elisabeth Rosenthal and Glenn Kramon in The New York Times suggests. In the model of policies that deny coverage for injuries sustained during dangerous activities, the authors indicate that insurers could start “penalizing the unvaccinated” because their refusal to immunize poses a threat to public health. Rosenthal is editor in chief of Kaiser Health News and Kramon is a lecturer at the Stanford Graduate School of Business.

Companies also have the Equal Employment Opportunity Commission on their side, said Thomas Lenz, a professor at the University of Southern California Gould School of Law. As long as their mandates abide by the Americans with Disabilities Act and the Civil Rights Act of 1964, the commission said in May, companies could require “all employees physically entering the workplace to be vaccinated” against the coronavirus.

Despite the EEOC’s guidance, some businesses are still refraining from issuing mandates for fear of alienating their personnel, Lenz said.

“We see that employers are as concerned with what they perceive as a skill shortage, a labor shortage, as anything in deciding whether to mandate the vaccinations,” Lenz said. “And for that reason, employers don’t want to scare people away, as they feel they might be able to accommodate and keep the workforce in some other way.”

-CNBC’s Nate Rattner contributed reporting.

Oil derrick pumps operate at the Inglewood Oil Field in Culver City, California, on Sunday, July 11, 2021.

Kyle Grillot | Bloomberg | Getty Images

Oil prices slid on Monday, building on last week’s steep losses, as rising Covid cases prompted fears of a demand slowdown.

West Texas Intermediate crude futures declined 3.6% to trade at $65.85 per barrel. The contract traded as low as $65.15 earlier in the session. International benchmark Brent crude declined 3.5% to $68.21 per barrel.

“The biggest challenge for oil markets remains the uncertainty around COVID as the ‘delta variant’ has made for the highest daily case counts since early 2021,” noted analysts at Bank of America.

Last week both contracts dipped more than 7% for their worst week since October. The slide came amid demand worries as well as a surprise build in U.S. crude inventory. The U.S. Energy Information Administration said Wednesday that crude stocks rose by 3.6 million barrels in the prior week, while analysts surveyed by FactSet were expecting a 2.9 million barrel draw. Gasoline stocks did, however, decline by a larger-than-expected 5.3 million barrels.

Data out of China also weighed on crude on Monday. The country’s export growth unexpectedly slowed in July, while imports rose 28.1% compared to a year earlier. This was below forecasts that called for a 33% increase.

China, which is the world’s second largest oil consumer, imported 9.7 million barrels per day in July, which was the fourth straight month below 10 million barrels per day, according to analysts Commerzbank.

“The price slide is continuing [Monday] amid growing concerns about demand again,” the firm wrote in a note to clients. “Market participants are watching the rising coronavirus figures in Asia with considerable alarm, as this could prompt the Chinese government to take drastic measures in line with its strict zero Covid strategy.”

A possible slowdown in demand as portions of the world reinstate lockdown measures follows OPEC and its allies further boosting production this month. In April 2020 the group implemented record production cuts of nearly 10 million barrels per day as the pandemic sapped demand for petroleum products.

Oil has slowly recovered and WTI is still up 40% for 2020. In July the contract traded as high as $76.98, a price not seen since 2014.

“The oil market is likely to remain rangebound here as the physical market is poised to remain in a deficit through the end of the year,” said Tom Essaye, editor of the Sevens Report.

– CNBC’s Michael Bloom contributed reporting.

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