Regal Entertainment Reports Better-Than-Expected Third-Quarter Profit
UPDATED: The movie theater giant benefited from higher admission and concession revenue and cost controls, and CEO Amy Miles says price hikes by Netflix and Redbox are helpful to exhibitors and her industry's relationship with studios hasn't deteriorated.
NEW YORK - Movie exhibition giant Regal Entertainment Group on Thursday reported a third-quarter profit that exceeded Wall Street expectations. The company cited higher admissions and cost controls.
During a conference call, management said that studios' efforts to push back video rental windows can help the film eco-system, and Regal CEO Amy Miles said that price hikes by Netflix and Redbox, which announced its increase on Thursday, can help movie theater operators. "I still believe it is helpful to our side of the business," she said.
Asked about the recent Tower Heist premium VOD plans that Universal Pictures later withdrew, Miles said Regal appreciated the dialogue with the studio. "I felt that was an improvement in the process" over earlier public words over premium VOD trials by a group of studios.
A recent discussion about the best way to apportion costs for 3D glasses, Miles said these are typically private discussions that provide mutual benefits. "I would expect that the 3D glasses issue will be the same way," she said, adding that her firm is open to discussions about new models as long as Regal's economics aren't affected.
Asked about the overall state of relationships between studios and distributors, Miles said recent industry have probably been more public than they have been in the past. But she said that "I wouldn't characterize [the relationship] as different," andt both the studios and exhibition want to make sure that nothing happens to denigrate the box office.
Management said that Killer Elite, the first release from Open Road Films, its distribution venture with AMC, has made $25 million in box office so far and will be profitable as it moves through distribution channels.
The Grey with Liam Neeson is Open Road's next release, scheduled for January. Regal management said on a conference call that the film will not be pulled into late December to give Neeson an Oscar run given the additional cost that this would entail. The firm also said that if Neeson is worthy of award consideration, it shouldn't matter when the film was released.
Miles said the holiday film season looks promising, highlighting a number of titles presented in different formats, such as 3D, Imax and 2D. Also, this holiday season has 26 wide releases versus 23 last year, she added. Miles also cited films that are parts of known franchises, such as Twilight, Sherlock Holmes and Mission: Impossible. Overly, the Regal CEO said her firm is optimistic about the possibility of box office growth in the fourth quarter.
Miles also told analysts on Thursday that Regal has no plans to lower its 3D ticket price premium.
The exhibition giant's quarterly earnings of $25 million, compared with $42.6 million in the same period a year earlier, which was boosted by a one-time gain of $31.4 million from the sale of stock in cinema advertising venture National CineMedia.
Revenue rose 7 percent to $744 million. Admissions revenue grew from $486 million to $515 million, while concession revenue rose from $183 million to $197 million.
"We are pleased that industry attendance growth combined with our continued focus on cost control allowed us to achieve significant growth," said Miles. "We are encouraged by the record summer box office and remain optimistic regarding the upcoming holiday film slate."
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