Cinemark Narrows Q1 Loss to $74 Million Despite Omicron Surge
Cinemark Holdings Inc. on Friday posted a 300% jump in first-quarter revenues, to $460.5 million, as the nation’s third largest movie-theater chain continued to recover the pandemic despite the spread of the Omicron variant.
In addition, the Plano, Texas-based company reported a smaller overall loss of $74 million, compared to $208 million for Q1 the year before. The per-share loss was 62 cents, which was on track with the 63 cents per share that analysts surveyed by FactSet had projected; Wall Street had also projected smaller revenues of $447.3 million.
Revenues were also down from Q4 heights of $666.7 million, when Hollywood studios released a slew of high-profile new projects and movie attendance is traditionally high.
Attendance for the quarter hit 33.1 million on the strength of studio hits like Sony’s “Uncharted” and Warner Bros.’ “The Batman,” which arrived late in the quarter after the Omicron surge had subsided. The average ticket price was $7.12, while concession revenue averaged $5.23 per ticket buyer.
The stock closed down 6% to $15.09 during Thursday’s across-the-board slide.
“Cinemark once again outpaced North American industry box office recovery by a significant 650 basis points when comparing first quarter 2022 against first quarter 2019. Similarly, our international admissions surpassed their corresponding industry results by 500 basis points,” Cinemark president and CEO Sean Gamble said in a statement. “Despite a challenging start to the quarter due to omicron-related shifts in film content, we delivered positive Adjusted EBITDA, driven by our industry out-performance, strong concessions sales and stringent cost management.”
During the fourth quarter, Cinemark and other major theater chains turned a profit for the first time since the COVID-19 pandemic began, thanks to a slew of blockbusters like Sony’s “Venom: Let There Be Carnage,” MGM’s “No Time to Die,” and the record-breaking opening of Sony’s “Spider-Man: No Way Home,” not to mention a bit of help from the family films Disney’s “Encanto” and Universal/Illumination’s “Sing 2.”
But while “The Batman” provided a boost with a $134 million domestic opening and $338 million through the month of March, there were no major box office successes in January or February during the height of the Omicron surge. While films like MGM’s “Dog,” Sony’s “Uncharted” and Paramount’s “Scream” found modest box office success, grosses for the quarter did not pass the $1 billion mark until “The Batman” was released in early March.
Looking ahead, the company should see a return to profitability. April saw Paramount’s “Sonic the Hedgehog 2” bring back families to cinemas in a big way with a running domestic total of $162 million; and while Warner’s “Fantastic Beasts: The Secrets of Dumbledore” and Sony’s “Morbius” were disappointments, they provided higher gross totals for theaters than films released in the first two months of the year.
Heading into the summer season, turnout should only continue to trend upwards with Disney/Marvel’s “Doctor Strange in the Multiverse of Madness” already setting COVID-era records overseas ahead of a domestic opening weekend where it is expected to top $170 million. Films like Universal’s “Jurassic World: Dominion,” Disney’s “Lightyear” and Paramount’s “Top Gun: Maverick” will also hit theaters in the second quarter, creating more momentum for moviegoing.
