Six Flags shares plummet as theme-park attendance dwindles
Six Flags stock took a stomach-churning plunge Thursday after the theme-park chain reported a surprise quarterly loss and slashed its dividend.
The Texas-based company’s shares opened 20 percent lower at $30.40 on news that it lost $11.1 million, or 13 cents a share, in the fourth quarter of 2019. Wall Street was expecting a profit of 14 cents a share, according to Bloomberg data.
The firm blamed the loss in part on declining revenue from weak attendance, as revenue from park admissions fell about 5 percent year-over-year to $144.5 million in the fourth quarter. Total revenues dropped about 3.1 percent to $261 million, a number that slightly beat the average analyst estimate reported by Bloomberg.
Six Flags also cut its dividend for the first quarter of this year to just 25 cents a share — nearly 70 percent less than the dividend it declared in November. Shares in the company were recently down 18.1 percent at $31.11 as of 12:23 p.m. Thursday.
Six Flags also took about $10 million in charges stemming from agreements to develop theme parks in China that the company said it terminated this month because its partner there defaulted on its payment obligations.
“It is unlikely that the company will recognize any revenue or income in 2020 related to the development of parks in China,” Six Flags said.
Six Flags said it expects to reap adjusted earnings before interest, taxes, depreciation and amortization of $435 million to $465 million as it grapples with increasing costs and soft revenue trends. The company plans to unveil a new strategic plan in May.
“Our company has difficult to replicate assets that provide a unique experience in themed entertainment, and exciting potential for profitable growth,” Six Flags president and CEO Mike Spanos said in a statement.
Source: Read Full Article