Ben Mogil, entertainment analyst at Stifel Nicolaus & Co., cut his estimate for fourth-quarter box- office sales, saying cinemas will have trouble exceeding last year’s numbers.
“While there remains the chance to have a stronger box office should there be some sleeper hits, given the current malaise at the box office it is difficult to feel comfortable with that view,” Mogil wrote today in a note to investors.
Mogil forecasts a 3 percent rise for the period, down from 5 percent to 6 percent previously, led by “The Hobbit: An Unexpected Journey,” and said others expect a mid-to-high single-digit percentage gain. Studios and theater operators have struggled to stay ahead of last year’s pace, when attendance shrank to a 16-year low. Through Sept. 23, ticket sales at U.S. and Canadian cinemas are up 2.5 percent to $7.92 billion while attendance is ahead 1.3 percent.
Sales in last year’s fourth quarter declined 5.4 percent, Mogil wrote. There were seven films that collected more than $85 million in the period. Among cinema operators, Mogil recommends investors buy Imax Corp. (IMAX) and Regal Entertainment Group. (RGC) He has hold ratings on Cinemark Holdings Inc. (CNK), Cineplex Inc. (CGX) and RealD Inc. (RLD), the supplier of 3-D equipment.
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