Cinemark Earnings Fall Short of Estimates Despite 'Black Panther' Box Office
The theater operator, led by CEO Mark Zoradi, had the Marvel blockbuster on its screens.
Cinema giant Cinemark Holdings on Wednesday posted lower than expected first-quarter earnings, despite having Black Panther defying industry box-office projections during the latest quarter.
The company saw earnings fall to $62 million, compared with a year-ago $79.7 million, as earnings per share came to 53 cents, down from 68 cents a year ago, for the period ended March 31. The cinema chain missed analysts' earnings forecast from Thomson Reuters for 60 cents a share.
Cinemark's overall revenue for the first quarter came in at $780 million, virtually unchanged from a year-earlier $779.6 million. That beat the analysts' forecast of $761.7 million, as the cinema chain saw a rise in overall domestic revenues offset a fall in its international business.
"Fueled by the unprecedented success of Black Panther, the North American industry box-office results in the first quarter far surpassed expectations, demonstrating the powerful potential of a breakout film," Cinemark CEO Mark Zoradi said.
But the Black Panther showing at the multiplex wasn't enough for Cinemark to stem a fall in admissions revenue to $452.6 million, against a year-earlier $476.4 million. U.S. admissions revenue fell 1.9 percent to $349.3 million, while international admissions revenue tumbled 14.1 percent to $103.3 million.
Zoradi cited a "content-driven attendance decline" to explain the reduced first-quarter earnings during a morning analysts call. He added Black Panther performed well in Latin America, where Cinemark has a wide presence, but was not the "runaway breakout hit" it became in the U.S. market.
"This hasn't decreased our enthusiasm for Latin America," he added in response to a question from an analyst over how ongoing political and business disruption in Brazil, Argentina and other Latin American markets was impacting movie attendance.
Lower attendance also hurt concession during the latest quarter as revenue dropped to $261.7 million, compared with $268.2 million in the same period in 2017. Across the same quarter, however, concession revenue per patron rose 5.8 percent to $3.82 for the three months ended March 31.
Cinemark, like rival exhibitors, has been expanding its theater network and introducing upgrades such as recliner seating to improve the theater experience.
Zoradi also touted the company's newly launched discounted ticket program, Movie Club, through which members can see one regular movie a month for $8.99 and receive a 20 percent discount on concessions, among other features. He said Movie Club had so far signed up around 230,000 customers.
Cinemark runs 533 theaters with 5,964 screens in 41 U.S. states, Brazil, Argentina and 13 other Latin American markets.
May 9, 9:30 a.m. Updated with comments made by CEO Mark Zoradi during an analyst call after the release of the first-quarter results.