Cinemark Earnings Drop on Lower First-Quarter Box Office

"We are extremely optimistic about the potential for another record year, considering the strength of content to come," says CEO Mark Zoradi.

Cinema giant Cinemark Holdings on Tuesday reported lower first-quarter earnings as the box-office drop for the quarter meant lower attendance, admissions and concession revenue.

The company posted quarterly earnings of $32.7 million, or 28 cents per share, compared with $62.0 million, or 53 cents a share, in the year-ago period.

Cinemark's revenue for the latest quarter came in at $714.7 million, down from $780.0 million in the year-ago period. Admissions revenue of $395.5 million was down 12.6 percent from the year-earlier $452.6 million, while concession revenue fell 4.0 percent to $251.3 million from $261.8 million.

Attendance dropped 9.1 percent to 62.3 million patrons; the average ticket price came to $6.35, down 3.9 percent as a drop in international markets more than offset a 1.9 percent U.S. gain; and concession revenue per patron increased 5.5 percent to $4.03.

U.S. admissions revenue fell nearly 12 percent to $308.8 million, while international admissions revenue fell 16 percent to $86.7 million.

During an analyst call, Cinemark CEO Mark Zoradi attributed the drop in the first quarter box office to a tough comparison with the year-earlier financial quarter, during which ticket sales got a bump from the releases of Star Wars: The Last Jedi, The Greatest Showman and Black Panther.

Despite the recent downturn at the North American box office following a record-shattering 2018, Zoradi told analysts the start of the summer, with Avengers: Endgame and its "truly historic results," portended another impressive year for Hollywood movies in 2019.

"We remain enthusiastic about the full-year box office potential," Zoradi said, with a rebound in international cinema attendance expected during the second and third quarters of 2019. Cinemark recently aggressively added screens and seats for Avengers: Endgame as it saw pre-sales for the much-anticipated blockbuster movie explode.

"We had dozens of theaters playing the movie in the middle of the night," he reported. Zoradi also said Cinemark had reached the 650,000-member milestone for its Movie Club cinema ticket subscription program, with around 2,000 members per theater. Movie Club is delivering around 12 percent of the circuit's box office.

Zoradi during the analyst call also discussed Walt Disney doubling its film slate with the acquisition of 20th Century Fox and Fox Searchlight, and what that might mean for future franchise releases from those studios. The merger gave Disney control over James Cameron's Avatar franchise, the X-Men universe and Deadpool, with the latter two now under the direction of Marvel Studios.

Zoradi said of those movie franchises and their future: "They [Disney] have been vocal and clear that those will not change and they want to continue with those ... I believe the key elements that Fox had in the works will continue."

The Cinemark boss added he had not discussed with Disney future terms for movie releases, and possibly better rental economics for the studio, as both parties continue to work under a multi-year deal.

May 7, 6:30 a.m. Updated with comments by Cinemark CEO Mark Zoradi made during an analyst call.