Cinemark Fourth-Quarter Earnings Rise, Exceed Expectations
The movie theater operator touts a strong start to 2015 and the upcoming film slate after posting lower admissions, but higher concession revenue.
Movie theater operator Cinemark Holdings on Wednesday reported better-than-expected fourth-quarter financials.
Cinemark, which has a strong presence in Latin America, posted quarterly earnings of $47.3 million compared to $15.6 million in the year-ago period. The year-ago figure was affected by an after-tax loss of about $17.9 million on the sale of Mexican operations.
Quarterly revenue of $659.9 million rose 1.2 percent as admissions revenue fell, but concession revenue rose. U.S. revenue edged up only 0.4 percent, but international revenue rose 3.8 percent.
Admissions revenue amounted to $404.7 million in the fourth quarter compared with $412.6 million in the year-ago period. Attendance rose 1.4 percent to 65.7 million, but average ticket prices came in at $6.16., down 3.3 percent. Concession revenue of $214.8 million compared with $201.8 million, and concession revenue per patron reached $3.27 during the three months ended Dec. 31, up 5.1 percent.
Said Cinemark CEO Tim Warner: "Cinemark’s domestic box office revenues over-indexed the industry by 140 basis points for the fourth quarter of 2014, and worldwide, Cinemark exceeded the North American industry by more than 600 basis points on a currency adjusted basis."
He added: Looking back on 2014, I am proud of our strategic initiatives progression during the year, including adding 170 new state-of-the art screens to our circuit, completing the conversion of our worldwide first-run circuit to digital projection."
On the company's earnings conference call, Warner touted the strong box-office start to the new year, citing such hits as American Sniper and Fifty Shades of Grey. And he said his team was bullish on the slate for the rest of the year, citing its attraction to diverse audiences.
Asked about possible alternative windowing and release strategies for non-tentpole films, Warner said studios have in the form of electronic sell-through found a solution to strengthening home entertainment trends. He also said that for Cinemark it was important that "the theatrical window remains a priority" and said that the current windowing set-up was working for both studios and exhibitors. He added that it would be unfair to use different windowing strategies for big studios and others.
Warner also predicted further experimentations with alternative content, but said the company left the well-performing American Sniper on-screen instead of showing Game of Thrones in Imax in a recent special offer of two episodes from season four of the hit show and the worldwide debut of the series’ season five sneak-peek preview.
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