Shares of Cinemark Holdings Inc. (CNK) dropped by 3.7% in premarket trading on Friday, following the release of the movie theater operator’s fourth-quarter results, which revealed wider-than-expected losses, even though revenue beat forecasts. The company reported a net loss of $99.3 million, or 82 cents per share, compared to the prior year’s net income of $5.7 million, or 5 cents per share. This was much worse than the FactSet consensus of 32 cents per share. Revenue fell 10.0% to $599.7 million, which was higher than the FactSet consensus of $572.2 million. Admission revenue declined 11.7% to $304.6 million, which was still above the FactSet consensus of $289.1 million, while concession revenue was down 9.1% to $225.7 million, but still above expectations of $211.2 million.
In the United States, attendance fell 19.6% to 25.1 million, while average ticket price increased 8.6% to $10.00 and concession revenue per patron was up 11.6% to $7.43. The stock has lost 5.3% over the past three months as of Thursday, while the S&P 500 (SPX) has decreased by 1.05%.
The fourth-quarter results for Cinemark Holdings Inc. were a reflection of the difficulties that the movie theater industry has faced due to the ongoing COVID-19 pandemic. Cinemark’s revenue was negatively impacted by the closure of many of its theaters in the United States and Latin America, with only a few theaters remaining open with limited capacity. The company also had to limit its operating hours and reduce its film offerings.
The pandemic has also caused a shift in consumer behavior, with many people opting to stay home and watch films online. This has led to a decrease in demand for movie theater tickets, which has had a major impact on Cinemark’s bottom line. In addition, the company has had to incur additional costs associated with implementing safety protocols in its theaters, such as social distancing, increased cleaning and sanitization, and the use of face masks.
Cinemark is not alone in its struggle to survive the pandemic. Many other movie theater operators have also been affected, with many having to close their doors completely. This has had a ripple effect on other businesses in the industry, such as film studios and distributors, which have also seen their revenue drop significantly.
Despite the difficult operating environment, Cinemark has managed to remain afloat due to its strong financial position and its ability to quickly adapt to the changing circumstances. The company has taken a number of cost-cutting measures, such as reducing its workforce and closing some of its theaters, in order to reduce its expenses. It has also implemented various initiatives to increase its revenue, such as offering discounts and special promotions.
Going forward, Cinemark is optimistic that the situation will improve in the coming months as more people are vaccinated and restrictions are eased. The company is also hopeful that the release of new films and the return of major franchises will help boost attendance and revenue. However, the company is aware that it will take some time for the movie theater industry to fully recover and that it will need to continue to adapt in order to survive.
