Cinemark Quarterly Earnings Drop, CEO "Optimistic About Film Content" for Rest of Year
Mark Zoradi told analysts "I don't think there's anything epidemic relative to a problem with the product" amid weak Hollywood box office this summer.
Movie theater operator Cinemark Holdings on Friday reported lower second-quarter earnings that fell slightly below Wall Street expectations.
The exhibition giant, which has a major presence in Latin America, reported quarterly earnings of $51.2 million, down from $53.9 million in the same quarter last year. Revenue increased 0.9 percent to $751.2 million, as admissions revenue declined from the year-ago period to $449.9 million, while concession revenue rose to $262.3 million.
With weak Hollywood box office this summer weighing on exhibition stocks, Zoradi during a morning analyst call urged investors to take a long term view of the movie business. "I don't think there's anything epidemic relative to a problem with the product," he insisted.
Zoradi's optimism comes despite a downturn at the North American summer box office that has revenue industry-wide running 8 percent behind the same period last year. The Cinemark topper pointed to strong potential titles in the third quarter like Dark Tower and Kingsman: The Golden Circle, and an even stronger fourth quarter to come with releases like Star Wars: The Last Jedi and Thor: Ragnorak, underlining an overall impressive box office climate for 2017.
"When the whole year is done, it will be in pretty good shape," Zoradi predicted. He also stopped short of putting a box office prediction on the upcoming Star Wars 8 release, but assured analysts it would be a "very, very successful film."
Zoradi also touted Cinemark continuing to roll out luxury reclining seats in its domestic theaters to continuing out-performing industry rivals at the box office, and argued the recent downturn at the Latin American multiplex was more about fewer local language movies being released during the most recent quarter, against a year-earlier output.
He also pointed to two upcoming releases, Cars 3 and Transformers: The Last Knight shifting more into the third quarter, and Wonder Woman, while performing in Brazil, failing to resonate elsewhere in Latin America. "Most of this is shifting titles from one quarter to the next," Zoradi said.
Attendance during the latest quarter fell from 73.0 million to 69.4 million. The average ticket price came in at $6.48, up from $6.25 in the year-ago period, while concession revenue per patron hit $3.78, up from $3.47.
Zoradi in an earlier statement that accompanied his latest results said the company was "pleased with the consistency of our financial performance, including our second quarter’s global revenue growth, record food and beverage per caps, and year-over-year box office results that again exceeded the North American industry."
"We remain optimistic about film content for the remainder of the year, as well as the future growth potential that our strong foundation and strategic initiatives provide for our company," he added.
Aug. 4, 10:00 a.m. Updated with comments by Cinemark CEO Mark Zoradi to analysts during a morning call.