Cinemark Second-Quarter Earnings, Revenue Fall
Box-office flops pulled down results for the cinema operator.
Movie theater operator Cinemark Holdings on Tuesday posted lower second-quarter earnings and revenue on a weaker Hollywood movie slate.
Cinemark recorded net income of $53.9 million, compared with a year-earlier profit of $70.3 million, on revenue dropping to $744.4 million, compared to $799.9 million in 2015. The second-quarter earnings per share of 46 cents fell just short of analyst estimates of 47 cents and met revenue expectations.
Admissions revenue for the three months to June 30 dropped to $456.1 million, compared with $503 million from the same period in 2015, as fewer customers visited the local multiplex. The culprit was a slate of recent film duds, including a number of sequels, which did not produce the box-office results recorded by Cinemark during a record-setting 2015.
Cinemark CEO Mark Zoradi during an analyst call said the failure of sequels to connect with audiences was product-driven, and not a long-term trend. "It comes down to the movie," he told Wall Street watchers.
Cinemark, which has a strong presence in Latin America, saw international attendance dip only slightly, to 27.5 million patrons, from a year-earlier 27.7 million, despite economic headwinds in the region, while domestic attendance during the second quarter was 45.5 million patrons, compared with 49 million in the same period for 2015.
Zoradi said the successful debut of Suicide Squad this past weekend meant TV coverage of the Rio Summer Olympic Games had not yet dented Cinemark's theatrical box office in the Americas. "We haven't seen [a downturn] in Brazil, in Latin America or the U.S. We had an outstanding last weekend," he reported.
Elsewhere, concessions revenue fell to $253.6 million, against a year-earlier $259.5 million. During the analyst call, Zoradi touted Cinemark continuing to add luxury loungers, or reclining seats, and beer and wine sales as part of an ongoing upgrade of its auditoriums to better compete against Netflix and other new market competition.
He also looked for the box office to turn around during the second half of the year, adding Cinemark was upbeat about its upcoming Hollywood movie slate heading into 2017.
"We're sitting right now at a box office up three percent after the first two quarters. We're actually very pleased with where the business is," Zoradi told analysts.