BUSINESS

Cineplex Q4 profit falls despite higher revenue, misses estimates

The Canadian Press Published Tuesday, February 11, 2014 7:20AM EST Last Updated Tuesday, February 11, 2014 11:37AM EST

A Cineplex Odeon is pictured in North Vancouver, on May 15, 2012. THE CANADIAN PRESS/Jonathan Hayward

Text:

TORONTO -- Cineplex Inc. (TSX:CGX) turned in mixed financial results in the fourth quarter, with the national theatre chain's revenue up significantly but earnings falling short of estimates due to higher expenses.

The quarter ended a year of growth for Cineplex, which bought most of the Empire theatre chain to expand into Atlantic Canada and acquired indoor sign operator EK3 Technologies.

"During 2013 we executed two significant strategic acquisitions and implemented a number of key initiatives in our existing and emerging businesses," Cineplex president and CEO Ellis Jacob said in a statement.

"These actions have resulted in meaningful new opportunities to drive growth in 2014 and beyond."

Still, rising expenses and other factors combined to produce a fourth-quarter profit for Cineplex that was down from the comparable period of 2012 and below analyst estimates compiled by Thomson Reuters.

Cineplex earned $20.2 million for the quarter or 32 cents per diluted share for the fourth quarter, down from $32.7 million or 52 cents per diluted share a year ago.

The average analyst estimate had been for a profit of 48 cents per share.

The company's expenses for film, concessions, depreciation and amortization, interest and other costs were higher. Cineplex's adjusted earnings were also reduced by a higher payout under its long-term incentive program, in response to the company's higher stock price.

On the other hand, revenue for the last three months of 2013 rose 8.2 per cent from a year before to $323.2 million.

Box office revenue totalled $177.6 million of revenue or $9.42 per patron, up 2.6 per cent from a year earlier, while sales of snacks and other concessions totalled $93.3 million or $4.94 per patron, up 6.2 per cent.

Revenue from other sources such as media, a small but growing part of Cineplex's business, totalled $52.2 million, up 25 per cent.

The company's stock gained about 38 per cent last year, ending 2013 at $44.06. They closed Monday at $41.50 but fell about three per cent in early trading after the financial results were released.