Cinemark Fourth-Quarter Earnings Rise on Record Revenues
The theater operator, led by CEO Mark Zoradi, powered past profit and revenue expectations.
Movie theater operator Cinemark Holdings on Friday reported record fourth-quarter earnings and quarterly revenues that beat Wall Street expectations and sent its share price upwards.
Cinemark posted earnings of 82 cents per share for the quarter, against a year-earlier profit of 66 cents per share. That blew past an analyst estimate for earnings pegged at 47 cents per share.
The earnings beat sent shares in Cinemark up $2.26, or nearly 6 percent, to $41.98 in late morning trading on the New York Stock Exchange.
Cinemark is the country's third-largest theater chain, with more than 4,500 screens, and also has a major presence in Latin America. Like other exhibitors, it has faced competitive threats from tough times at the North American box office and rising competition from Netflix and other streaming alternatives.
Overall revenues at Cinemark for the three months to Dec. 31, 2017, were $749.9 million, beating an analyst forecast of $746.72 million. Cinemark was helped by admissions revenue rising 4.5 percent to $443.5 million, and concessions revenue up 10 percent to $261.2 million due to "strategic" price increases and the impact of newly launched theaters.
Fourth-quarter net income jumped to $95.1 million, against a year-earlier $77 million.
"We were able to deliver these all-time highs in in a box-office environment hat declined slightly year-over-year due to the successful execution of our strategic initiatives and the underlying strength of of Cinemark's operating fundamentals," Cinemark CEO Mark Zoradi said in a statement.
During a Friday morning analyst call to discuss Cinemark's latest financial results, Zoradi was bullish about box-office prospects for 2018. "Theatrical exhibition remains a stable and profitable industry," despite ups and down in multiplex attendance due to the draw of Hollywood tentpoles, he said.
"We remain optimistic about the 2018 film slate," the exec added, an outlook coming in the wake of the successful box-office launch for Black Panther, which he cited. The Disney and Marvel Studios superhero pic also launched strongly in Latin America.
Zoradi said the movie, directed by Ryan Coogler, outperformed launch ticket sales in Brazil for Guardians of the Galaxy, Wonder Woman and Deadpool. "The exhibition industry is tied more closely to film content, rather than economic cycles," he added of the Latin American market and its challenging economic environment.
Zoradi also was asked about interest among the major Hollywood studios for shorter theatrical windows and in offering films in a premium VOD window soon after their release in cinemas. "In all of our discussions with our studio partners, there's not a big emphasis on premium VOD," he said.
"With the Time Warner acquisition going on, with the Disney/Fox acquisition going on, with the improvement in box office ... I think there's less enthusiasm among the studios to push a premium VOD agenda," the exec added.
Zoradi reiterated his interest in accretive acquisitions in the U.S. and abroad, and touted his first virtual reality theater to open in the flagship Dallas venue, in partnership with location-based VR start-up The Void. He said during an analyst call the VR experience for Star Wars: Secrets of the Empire, produced by The Void and ILM, will play in the Dallas theater.
The Cinemark CEO also said he tried out the "hyper-reality" experience and reviewed it for analysts. "The Force is strong with this one," Zoradi reported.
Feb. 23, 11:45 a.m. Updated with Cinemark's raised share price on the New York Stock Exchange after release of its latest financial results.