Hollywood is currently on pace to lose over 7 billion dollars at the box office as coronavirus shutdowns in the United States and China continue to devastate the industry.

Box Office earnings are set to will by as much as 70 percent over the course of 2020 as a result of the coronavirus pandemic, according to an analysis by Eric Handler of the sales research MKM Partners.

According to his analysis, earnings will fall nearly 70 percent compared to the $11.4 billion taken last, the second-highest sales in box office history. This is a downgrade from his previous forecasts, which predicted a 55 to 60 percent fall because of the pandemic.

Movie theaters were set to reopen in August but however, due to the rise of coronavirus cases, states such as California are shutting down indefinitely meaning the future for Hollywood and movie theaters is looking bleak. In China, movie theaters are shutting down again as the outbreak continues to ravish the region in which the outbreak originated.

With government shutdowns reoccurring, there is serious uncertainty that movie theaters will be able to operate in full capacity in 2020.

“The near-term outlook for exhibition-related stocks remains extremely clouded,” Handler wrote. “It would be surprising to see theaters able to re-open nationwide before September, at the earliest.”

Handler is currently projecting domestic box office takings of $9.1 billion in 2021, still well below that of 2019, but a return to normal in 2022, with earnings of around $11.5 billion. Out of the major cinema stocks, he maintained a “buy” rating on Cinemark and Imax, while classifying the others as “neutral.”

“Beyond this year, we do believe there is pent up demand for consumers to get out of their houses for entertainment although the ramp-up in attendance will likely be gradual,” Handler explained. “With box office revenue likely remaining at a near-zero level well into the third quarter, the focus is once again shifting towards liquidity and cash burn.”

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