SeaWorld Entertainment Inc. (NYSE: SEAS) reported its third-quarter results Wednesday before the market open as $1.00 in earnings per share and $495.8 million in revenue. This was against the Thomson Reuters consensus estimates of $1.13 in earnings per share and revenue of $495.40 million. The third quarter from the previous year had $1.33 in earnings per share and $538.39 million in revenue.
SeaWorld maintained its guidance for the full year 2014 expecting income to be down 6% to 7%. It also expects to take a restructuring charge of up to $13 million in the fourth quarter. The consensus estimates for the 2014 full year are $0.83 in earnings per share and $1.37 billion in revenue.
With the reaction seen in SeaWorld shares after earnings and after prior controversy, one might wonder whether SeaWorld is done as a public stock. Recent public criticism over how the company treats its captive animals, coupled with underwhelming earnings, have caused a wave of misfortune for SeaWorld. This scandalous news seems to be following the company and continues to force its shares lower and lower.
The decline in revenue for the third quarter was primarily driven by a 5.2% fall in attendance, along with a 2.9% decline in total revenue per capita to $58.99.
Jim Atchison, CEO and president of SeaWorld, said:
Consistent with the update we provided in August, the attendance trends the Company experienced in the latter part of the second quarter continued into the third quarter. Clearly 2014 has been a challenging year, but I am confident we are taking the necessary steps to address our near term challenges and position the Company to deliver value over the long term.
When SeaWorld took a real hit to its stock in mid-August, analysts took the opportunity to jump all over it with some mixed reviews:
- Credit Suisse initiated coverage with an Outperform rating and a price target of $23.
- Barclays downgraded SeaWorld to an Underweight rating from Overweight with a price target of $40.
- J.P. Morgan reiterated a Neutral rating but moved its price target down to $21 from $34.
- FBR Capital Markets upgraded SeaWorld to an Outperform rating from Market Perform and raised its price target from $21 to $26.
Shares of SeaWorld closed Tuesday up almost 1% at $18.60. Following the release of the earnings report, the initial response was extremely negative and shares were down about 10% to $16.80 on Wednesday. Shares are pushing new 52-week lows that were initially made in mid-August.
The company’s stock has (or perhaps had) a consensus analyst price target of $22.64 and a 52-week trading range of $16.65 to $35.30.
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