SeaWorld Stock Sinks as Killer Whale Controversy Hurts Attendance

Wednesday, 13 Aug 2014 11:36 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Shares of SeaWorld Entertainment Inc. dropped to a record low Wednesday after the theme-park operator reported earnings that missed analysts’ estimates and said controversy over the treatment of captive whales in its shows hurt attendance.

The shares tumbled 33 percent to $18.90 at the close in New York, the lowest since they started trading in April 2013. Before Wednesday, SeaWorld had retreated 23 percent in a year following the release of “Blackfish,” a critical documentary about its performing killer whales.

The company acknowledged for the first time that pressure from animal-rights groups is reducing attendance, said Barton Crockett, an analyst at FBR & Co., calling second-quarter results “surprisingly weak.” SeaWorld fought off a proposed ban on keeping orcas in captivity in California with a lobbying campaign that raised doubts about claims that the animals are harmed in its parks.

“Attendance in the quarter was impacted by demand pressures related to recent media attention surrounding proposed legislation in the state of California,” Orlando, Florida-based SeaWorld said in a statement.

SeaWorld expects revenue to decline as much 7 percent in 2014. Sales fell 1.5 percent to $405.2 million last quarter, the company said, missing the $445.2 million average of estimates compiled by Bloomberg. Earnings of 43 cents a share also trailed the average prediction of 58 cents.

Attendance at the company’s 11 parks increased 0.3 percent in the quarter from a year earlier, reflecting better weather and a later Easter holiday this year, the company said. FBR had estimated 4.3 percent growth, Crockett, who rates the shares market perform, said in a note to investors.

IPO Last Year


Before the controversy over “Blackfish,” SeaWorld sold shares at $27 each in its April 2013 initial public offering. Blackstone Group LP, which controlled the theme-park operator, chose an initial public offering for SeaWorld, snubbing takeover bids from Apollo Global Management LLC and Onex Corp., because the firm expected an IPO to yield better returns over time than a sale, a person familiar with the matter said last year.

Blackstone, which had owned all of SeaWorld’s equity, has since cut its stake to 22 percent, according to data compiled by Bloomberg.

In response to the slowdown, the company has hired an adviser to identify ways to cut costs this year and next, SeaWorld Chief Executive Officer James Atchison said on a conference call Wednesday. The savings will be used to reinvest in new attractions and to increase stock buybacks.

Weekday Discounts

SeaWorld will step up promotions, such as weekday discounts, to increase traffic at its parks. The company will promote events around the Halloween and Christmas holidays to boost attendance in the second half of the year, Atchison said.

Amid lobbying by SeaWorld, a California legislative panel in April put off for at least a year a proposed measure that would ban whale breeding and the use of the animals for entertainment.

In June, two members of Congress from California successfully placed an amendment in a farm appropriation bill calling for an updating of U.S. regulations about keeping orcas and other cetaceans in captivity, the Los Angeles Times reported on June 13.

SeaWorld is ramping up efforts to blunt criticism from animal-rights activists and protect its brand, and to counter the media attention from legislation proposed in California, Atchison said.

“We’ve seen the early benefits of these initiatives and expect to build on them through 2014 and into 2015,” Atchison said on the call.

© Copyright 2014 Bloomberg News. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

WalletHub Study: S&P 100 Companies' Average Tax Rate Rose to 28.3% Last Year

Wednesday, 17 Sep 2014 14:33 PM

Companies in the S&P 100 index paid an average 28.3 percent overall tax rate last year, including federal, state and int . . .

Buffett Says Burger King Taxes Show Other Logic for Hortons Deal

Thursday, 18 Sep 2014 11:10 AM

Billionaire investor Warren Buffett, who agreed to help finance Burger King's planned takeover of coffee-and-doughnut ch . . .

Scott Grannis: There Are Some Rays of Sunshine in the Longer-Term US Economy

Wednesday, 17 Sep 2014 14:20 PM

It's not all doom and gloom out there for the nation's economy. One optimistic analysis concludes a number of long-term  . . .

Most Commented
Top Stories

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved