SeaWorld Shares Tumble After Orlando Turmoil Crimped Attendanceby
SeaWorld Entertainment Inc. tumbled as much as 15 percent after the company reported lower theme-park attendance in Orlando, Florida, and cut its earnings outlook for the year.
Shares of SeaWorld slumped 14 percent to $12.77 at 11:30 a.m. in New York and fell as low as $12.58, the lowest price since private-equity owners Blackstone Group first sold shares to the public in April 2013. The stock was down 25 percent this year as of Wednesday’s close.
The theme-park operator welcomed 5.98 million guests in the second quarter, a 7.6 percent slide from a year earlier, according to a statement Thursday. That was the biggest drop in three years and primarily because of a decline in Florida, which saw fewer visitors from Latin America and a downturn in business in Orlando in the second half of June.
The economic troubles in the crucial Florida market compound the challenges for Orlando-based SeaWorld, which has battled animal rights activists over the use of killer whales in its parks. The company hired a new chief executive officer last year and said later it would phase out whale shows.
“Despite the challenges that accelerated this quarter, we are confident we are on the right path,” CEO Joel Manby said on a conference call after results were released.
SeaWorld said this year’s earnings before interest, taxes, depreciation and amortization would be $310 million to $340 million. The company was previously forecasting as much as $365 million.
Hotel occupancy in Orlando is down about 2 percent this year and other theme-park operators are lowering ticket prices to boost attendance, Chief Financial Officer Peter Crage said on the call.
“We have also seen theme-park competitors lifting blackout dates on their passes for the remainder of the year and some going back to non-peak pricing to attract guests,” he said. SeaWorld is extending hours at its parks and offering special events to lure customers, Crage added.
Orlando, the theme-park capital of the U.S., was hit by a spate of bad news in June that included the killing of 49 people in a nightclub and the death of a child in an alligator attack at Walt Disney World. Economic turmoil in Latin American economies like Venezuela and Brazil may also be playing a role. Visitors from the region were down 40 percent in the first half of the year, SeaWorld said.
Walt Disney Co., which reports quarterly earnings and attendance figures on Tuesday, fell 1.2 percent to $94.93.
SeaWorld cited signs that attendance is improving, with July visitors up 4 percent from a year earlier, including Florida, where two new attractions opened in June, Crage said. SeaWorld owns 12 parks across the U.S., including its namesake attractions in Florida, Texas and California.