SeaWorld stock soars; revenues up in 1st quarter
After lagging attendance and declining revenues, SeaWorld Entertainment’s latest quarterly earnings on Tuesday brought something new: Good news.
Attendance, annual pass sales, revenue and in-park spending all increased in the first quarter even though the company posted a $62.8 million net loss, which isn’t unexpected since only five of its 12 parks were open the entire quarter.
“There’s a lot to be optimistic about these results … They may finally be digging themselves out of the tunnel,” said Tuna Amobi, a SeaWorld analyst with CFRA Research, although he warned one quarter was not enough to call a trend.
SeaWorld stock rose by as much as 10 percent in trading Tuesday and closed at $16.99, up 7 percent.
The new interim CEO of
SeaWorld Entertainment touted an aggressive plan to build a new ride or attraction in every park each year and to run more efficiently.
“We’re confident in the direction we are heading and encouraged by the results we see in our business,” John T. Reilly, who is 10 weeks on the job of leading the Orlando-based company, told investors during a post-earnings call Tuesday.
Losses, adjusted for non-recurring costs, were 53 cents per share.
The results exceeded Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for a loss of 76 cents per share.
Attendance spiked 15 percent to 3.2 million visitors, compared with the first quarter a year ago. That the week before Easter occurred in the first quarter affected attendance by 175,000 to 200,000 guests, the company said.
Revenues rose by $30.8 million to $217.2 million and in-park spending jumped about 6 percent. Orlando’s Seven Seas Food Festival that featured drinks and live concerts helping fuel that growth, executives said. The festival was so popular, SeaWorld Orlando extended it through the end of April.
SeaWorld’s net loss was not unexpected since it’s typical of the first quarter, the company said, pointing to the fact that only five of its 12 theme parks are open for the entire quarter. Other factors, such accruing of a legal settlement and pre-tax expenses associated with layoffs, also contributed.
“We have a revamped capital strategy,” Reilly told shareholders as he discussed the new ride openings throughout the country that includes the Electric Eel, dubbed the tallest, fastest roller coaster in San Diego, and Ray Rush, a water ride at Aquatica Orlando — which both open Saturday.
Infinity Falls — another a water ride featuring a 42-foot drop and rushing rapids — is “our biggest project for SeaWorld Orlando,” Reilly said.
He did not give a specific ride opening date for Infinity Falls other than “as early in the summer as we possibly can,” Reilly said. “We want to open our attractions early. … The site is shaping up and we think it’s going to be an incredible attraction.”
SeaWorld announced last week it also planned to open a Sesame Street land in Orlando by spring 2019.
Tuesday’s earnings comes at a pivotal time for the company, which is currently in a search for a permanent CEO to replace Joel Manby who departed in February after another disappointing financial quarter. Reilly is a candidate for the job, a SeaWorld board executive said earlier.
“The biggest thing is going to be a new transition with a CEO,” Amobi said, adding it could shed insight for investors on the company’s strategic direction.
The strong first quarter could help Reilly’s chances to win the job, Amobi said although he pointed out the company is still following many of the initiatives started under Manby’s direction.
SeaWorld pledged to reveal more detailed plans and long-term goals later in August, chief financial officer Marc Swanson said Tuesday.