SeaWorld Entertainment Inc (NYSE:SEAS) plummeted after reporting lower than expected earnings for the third quarter and full-year guidance. The shares of the company were trading $16.32 per share, down by more than 12% at the time of this writing around 11:41 A.M. in New York.
For the third quarter, SeaWorld Entertainment Inc (NYSE:SEAS) generated adjusted net income was $88.6 million or $1.01 per dilute share. Its revenue declined 8% to $495.8 million.
The company’s financial results were lower than the $1.13 in earnings per share and $496.4 million in revenue expected by Wall Street analysts based on data compiled by Bloomberg.
SeaWorld Entertainment Inc (NYSE:SEAS) explained that its revenue was negatively impacted by a 5.2% decline in attendance and a 2.9% drop in revenue per capita. The company had 8.4 million visitors during the quarter, down from 8.9 million in the same period a year ago.
Its Cash flow from operating activities was $136.4 million, down from $178.6 million in the year-ago quarter.
SeaWorld Entertainment affected by Blackfish documentary
The company has been facing negative publicity since the release of Blackfish, a documentary suggesting that its treatment of its performing orcas provoke violent behaviors on the mammals and led to the death of trainers.
Over the past three months, three airline operators cut their relationship with SeaWorld Entertainment Inc (NYSE:SEAS).
In a statement, Jim Atchison, president and CEO of SeaWorld Entertainment Inc (NYSE:SEAS) 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.”
Atchison added that SeaWorld Entertainment Inc (NYSE:SEAS) is implementing a cost savings plan. The company expected to achieve approximately $50 million in annual cost savings by the end of 2015.
The company is also adjusting its attraction and marketing strategy to resolve its top-line concerns. “While we recognize that we are in the early stages of these initiatives, we firmly believe these actions will enable us to overcome the current challenges we face and enhance our competitive standing,” said Atchison.
Future development projects
SeaWorld Entertainment Inc (NYSE:SEAS) extended its Memorandum of Understanding with its partners in the Middle East. The company continues to work with its partners in evaluating the business plan, technical models and proposed agreement for a multi-park development. The first phase of the project is expected to open on 2020.
SeaWorld Entertainment is also working with Village Roadshow Theme Parks on development opportunities in Asia and other international markets.”
SeaWorld Entertainment full-year guidance
For the full-year 2014, SeaWorld Entertainment Inc (NYSE:SEA) expected its revenue to decline in the range of 6% to 7% and adjusted EBITDA to fall by around 14% to 16%.
The company estimated to incur $13 million in restructuring charge related to its cost reduction initiatives in the fourth quarter. SeaWorld Entertainment also expected to its capital expenditures to be in the range of $155 million to $165 million this year and $185 million to $195 million in 2015.