SeaWorld Entertainment (SEAS) suffered a whale of an earnings miss today, sending the stock falling 9.78% to $16.78.
The operator of SeaWorld and Busch Gardens reported a profit of $1.01 a share, down from $1.34 a share a year earlier and below the $1.13 a share expected by the Street. Revenue fell 7.9% to $495.8 million.
To blame? Continued bad publicity following the 2013 release of the documentary film “Blackfish” and increased competition in the Florida market from the likes of Disney (DIS) and UniversalStudios, owned by Comcast (CMCSA)
Park attendance fell 5.2% during the quarter, typically the biggest of the year for SeaWorld, compared with a year before. Through the first nine months of the year attendance has fallen 4.7%.
According to FBR Capital Markets analyst Barton Crockett, Disney reported a 4% rise in attendance and a 6% rise in per cap spending at its domestic parks, driven mainly by Disney World in Orlando. Universal reported 17% revenue growth in its parks segment, thanks in part to positive reception for the new Harry Potter Diagon Alley attraction that opened July 8 in Orlando.
But Crockett notes that SeaWold maintained its full year guidance. He writes:
…full year guidance was maintained, suggesting a better than anticipated trend in 4Q14, with a YOY EBITDA increase of 5% to 24%, perhaps tied to a better-than-expected cost-cutting initiative generating $50 million of savings versus previous suggestions for at least $40 million.
SeaWorld, which operates 11 theme parks, said in August it would build new, larger killer-whale facilities, with the first set to open in San Diego in 2018.
That plan hasn't appeased animal-rights groups opposed to captive breeding of the whales or their use in shows.
SeaWorld has fallen more than 50% since hitting a 52-week high in March at $35.22 a share.
