Yahoo Finance Cinemark Swings to First-Quarter Profit Despite Lower Revenue
Movie theater owner Cinemark Holdings reported first-quarter revenue of $572.9 million for the three months ended March 31, down 5 percent from $610.8 million in the prior year.
That beat a Wall Street analysts estimate for overall revenue at $558.2 million. Overall attendance fell to 40.0 million patrons across its global footprint, down from 42.9 million customers in 2023, due to last year’s Hollywood strikes and their impact on the studio movie supply.
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Admissions revenue came in at $289.8 million, down 6.8 percent from $311.0 million, and concession revenue also fell 5 percent to $224.2 million from a year-earlier $235.8 million, as food and drink sales were hit by the attendance decline, including in Latin America.
The company reported a net profit of $24.8 million, compared to a loss of $3.1 million in the prior year, though, helped by a gain of $27.7 million from an income tax benefit due mainly to the release of valuation allowances in certain foreign markets. The diluted earnings per share was 19 cents, against a per share loss of 3 cents last year. That beat an analysts estimate for a loss of 21 cents per share.
During the latest quarter, Cinemark in the face of post-Hollywood strikes headwinds saw top box office performance from Hollywood titles like Dune: Part Two, Kung Fu Panda 4 and Bob Marley: One Love. Cinemark CEO and president Sean Gamble in a statement accompanying his first-quarter results said North American industry box office so far this year had declined “only modestly versus 2023 despite last year’s strike-induced headwinds.”
Gamble added: “Outsized results across a wide array of diverse films provide further validation that consumer enthusiasm for experiencing compelling content in an elevated, cinematic, theatrical setting remains robust.”
On a morning analyst call, Gamble said movie production by the Hollywood studios — key suppliers to movie chains — had returned to strength after the dual writers and actors strikes, and new market entrants like Amazon and Apple helped lift the theatrical exhibition sector with new content.
“They’re building their slates back in many respects towards where they were pre-pandemic, and in certain cases are looking to go beyond that. But it’s just going to take some time,” he said of the major studios on the movie production front.
Asked about inflationary pressures dampening consumer spending in the overall U.S. economy, Gamble told analysts that had yet to impact attendance and concession sales in his theaters. “While consumers may scale back on other things… (movie theaters) is a localized, affordable means of entertaining themselves, and they still tend to indulge when they come to theaters. And we just continue to see that in this current environment,” he reported.
Gamble also discussed possible mergers and acquisitions amid industry consolidation coming out of the pandemic. He said Cinemark could go into the market in the next year to “target high quality assets that we believe can deliver solid returns over time.” But any dealmaking would have to be weighed against currently high borrowing costs, which required the company to remain “disciplined,” he added.
Cinemark’s stock rose by 87 cents, or 5 percent, to $18.30 in pre-market trading on Thursday.
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