SeaWorld Drops After Cutting Dividend, Suspending Future Payoutsby
Dividend payable on Oct. 7 cut 52 percent to 10 cents a share
Some of savings will be used to repurchase SeaWorld shares
SeaWorld Entertainment Inc., battling shrinking attendance at its theme parks, fell the most in almost seven weeks after cutting its quarterly dividend by more than half and suspending future payouts.
The shares dropped as much as 7.3 percent to $11.77, the biggest intraday drop since Aug. 4, and were down 4.9 percent to $12.07 at 9:52 a.m. in New York.
Shareholders of record as of Sept. 29 will receive 10 cents a share, payable on Oct. 7, and then future payments will be stopped, SeaWorld said Monday in a statement. The previous dividend had been 21 cents. The company’s largest stockholder is Blackstone Group LP, which has a 22 percent stake.
Halting the payments will let the company support the long-term development of the business, Chief Executive Officer Joel Manby said in the statement. The shares have fallen 36 percent this year after Orlando, Florida-based SeaWorld reported lower attendance and reduced its earnings guidance.
“We will remain disciplined and regularly assess our allocation of capital,” he said.
The company said it will redeploy the additional capital to shareholders through opportunistic stock buybacks through the end of 2016.
SeaWorld has battled an ongoing campaign by animal rights activists who say the company shouldn’t keep killer whales in captivity. After negativity publicity surrounding the whale documentary “Blackfish” and legislative efforts to halt breeding ate into attendance, SeaWorld said it would no long use the animals for entertainment-related shows and no longer mate them.
Under Manby, who came on as chief executive last year, the company is trying to invest in more non-animal attractions, such as roller coasters and ocean-themed rides.