Movie-Theater Stocks Sink as CEOs Warn of Tough Second Quarterby
Movie-theater stocks fell Friday after two top executives said the industry faces difficult sales comparisons with last year’s second quarter, which was led by the box-office hits “Jurassic World,” “Furious 7,” and “Avengers 2.”
AMC Entertainment Holdings Inc. plunged as much as 7.6 percent, Regal Entertainment Group lost 6.5 percent and Cinemark Holdings Inc. tumbled 4.5 percent. Carmike Cinemas Inc., which has agreed to be acquired by AMC, slipped less than 1 percent.
“We recognize that there are some difficult comps ahead,” Regal Chief Executive Officer Amy Miles said on an earnings call Thursday. On Friday, AMC CEO Adam Aron said the upcoming second and fourth quarters of 2016 present “some challenging comparisons to the blockbusters in the prior year.”
Second-quarter releases last year generated $3.09 billion in domestic ticket sales, led by “Jurassic World” with $514.4 million, according to Box Office Mojo. “Avengers” brought in $453 million and “Furious 7” recorded $351 million. This quarter’s slate includes “The Jungle Book” and “Captain America: Civil War.”
“While we saw upside results from Regal last night and AMC this morning, we believe the cautionary comments around Q2 from management and Q2 consensus numbers that remain too aggressive are beginning to weigh on shares that had a strong year-to-date run,” said Eric Wold, a B. Riley & Co. analyst. He has a neutral rating on both AMC and Regal.
Regal’s first-quarter earnings excluding some items rose to 27 cents a share, according to a statement Thursday from the Knoxville, Tennessee-based company. That compared with analysts’ estimates of 25 cents. First-quarter revenue grew to $787.1 million, beating projections of $774.3 million.
AMC’s earnings increased to 27 cents a share, exceeding a 21-cent estimate by analysts. First-quarter revenue grew to $766 million, compared with analysts’ 766.7 million estimate.