Media that cover the entertainment industry tends to focus on films that under-performed at the box office. This year there were some big-budget films with small box-office results, such as “The Lone Ranger” starring Johnny Depp and “After Earth” with Will Smith. But it turns out that these are the exceptions to the rule–in the second quarter, 11 films grossed over $100 million in box-office receipts, compared to six that reached that milestone in the second quarter of 2012.
Today we look at three large theater operators that sounded positively joyful when they made their second-quarter earnings announcements.
Right on the cine-mark
Cinemark Holdings, Inc. (NYSE:CNK) operates 504 theaters with 5,794 screens across 40 states, and also in Mexico, Brazil, Argentina, and 10 additional Latin American countries. It announced a nearly 12% quarterly revenue increase to $725.6 million. Other key metrics were just as vibrant: admissions revenue rose 11% as attendance increased 6.7%. The popcorn was really poppin’: concessions revenue soared 13.6%. Cinemark Holdings, Inc. (NYSE:CNK)’s adjusted EBITDA was $178 million, up 13% from 2012.
Tim Warner, Cinemark Holdings, Inc. (NYSE:CNK)’s CEO, brushed aside the headlines about box-office stinkers to point out that North American box-office receipts reached a record level for the quarter, over $3 billion, up almost 8% from last year’s second quarter.
He credited the diversity and breadth of films that came out of Hollywood during the quarter. This points out a key risk factor each of these companies faces: success depends on the quality of the product delivered to them by the film- production companies and how effectively these films are marketed.
But do they even have an idea of which films will be particularly successful? As we saw with the example of Mr. Depp and Mr. Smith, past success does not guarantee future positive results. In following these companies, it helps to keep up with box-office trends and announcements of upcoming releases of films. In other words, you have to be good at picking movies as well as stocks
Regal-ing us with great results
Regal Entertainment Group (NYSE:RGC) is the nation’s largest operator of multi-screen theaters, with 7,340 screens and 576 theater locations in 42 states at the end of the second quarter.
This company reported record quarterly results in total revenue, admissions revenue and adjusted EBITDA. Chief executive officer Amy Miles pointed to the healthy box-office environment and the company’s ability to integrate recent acquisitions as key drivers of its success.