SeaWorld shares lose over a fourth of its value today after the company missed estimates and its quarterly revenues declined
SeaWorld Entertainment Inc. (SEAS),
which closed at $28.15 yesterday, declined over 28% in pre-market
trading today after the company reported its second-quarter earnings. It
is down more than 26% in the first few minutes of trading.
SeaWorld’s adjusted EPS of $0.43 is 26.1% below
analyst’s expectation of $0.58. Its revenues of $405.2 million fell 1.5%
year-over-year (YoY), and were 9% below estimates of $455.22 million.
Despite a challenging industry environment, parks attendance edged up
0.3% YoY, driven by attendance benefits from opening Sea World Orlando,
the company’s largest expansion ever, and by favorable weather and a
shift in the timing of the Easter holidays. 6.6 million people attended
the parks during the quarter, but the impact was offset by lower
attendance at SeaWorld’s destination parks.Adjusted EBIDTA for the leading theme park and entertainment company edged down from $127 million in the previous year to $126.1 million in the most recent quarter. Cash flow from operations was $120.5 million in the quarter, compared to $73.6 million in the year-earlier period.
In its attempt to expand its reach beyond the US, SeaWorld also announced a share repurchase program worth $250 million for January 2015, and entered into a Letter of Intent with Village Roadshow Theme Parks, another prominent entertainment and media company, to build theme parks together in Pan-Asia, India and Russia.
In the upcoming quarters, SeaWorld expects to cut costs and to reinvest in new and exciting attractions at their destination parks.
For its entire fiscal 2014, the company maintained its previous revenue guidance and expects revenues to decrease by 6-7%. It now expects its adjusted EBITDA to decline 14-16% YoY, after considering the cost-cutting initiatives it will implement.
