Regal reports stronger Q4
Financials boosted by extra weekNEW YORK -- Regal Entertainment Group on Thursday reported a 30% profit increase for its fourth-quarter results driven by a divestiture gain and an additional week of business when compared to the year-ago period.
However, the exhibition giant missed Wall Street estimates, sending shares down 9.1% to $9.36.
During a conference call, execs said Regal's digital-screen rollout remains delayed amid the credit crunch, but they lauded the early 2009 boxoffice gains despite the recession and said a growing slate of 3-D releases should energize the business.
Management also said it would likely review any theaters put up for sale by Sumner Redstone's National Amusements but warned that the credit crisis continues to make deals difficult. "Clearly financing would be an issue," Regal CEO Mike Campbell said.
Latest market chatter said that National Amusements could put at least 900 of its 1,500 screens up for sale at any minute. One observer suggested the company could retain its theaters in New England, New York and New Jersey (about 600 screens in total) and Russia (63).
Knoxville, Tenn.-based Regal reported a quarterly profit of $30.1 million, up from $23.2 million in the year-ago period. Revenue rose 18% to $711.7 million thanks to the extra week and the acquisition of Consolidated Theatres.
"We are pleased with our 2008 accomplishments, including the successful acquisition and integration of Consolidated Theatres," Campbell said. "We are also encouraged by the early 2009 boxoffice results in this challenging economic environment."
Campbell said year-to-date industrywide boxoffice is up 15%.
Regal's fourth-quarter admissions revenue rose 18%, while concessions sales grew 22%. Attendance increased 16%, and the average ticket price rose 2.2% to $7.75.
Some analysts said underlying attendance trends at Regal remained weaker than at peers. But in a sign that Regal's customers still spend money on popcorn and soda despite the recession, average concessions per patron rose to $3.13 from $2.97 in the year-ago quarter.
Campbell was bullish on this year's film slate and the growing 3-D lineup. "The 3-D film slate, which includes approximately 45 future films -- that breaks down to 18 films in 2009, 16 listed films in 2010 and 11 films already listed in 3D for 2011 -- will create significant incremental margin opportunity," he said.
He added that Regal will have at least 232 3-D screens ready for DreamWorks Animation's March 27 bow of "Monsters vs. Aliens."