Cinemark Holdings Inc. (CNK, Financial), one of the world’s largest motion picture exhibitors, said full-year revenues increased 2.5% from 2016 to 2017, highlighting the third consecutive year of record results of operations.
The Plano, Texas-based entertainment company reported net earnings of 82 cents per share for the quarter ending Dec. 31, 2017, outperforming analyst estimates by approximately 35 cents per share.
Company accelerates revenue growth through multiple initiatives
CEO Mark Zoradi said that even in a declining box office environment, Cinemark reported all-time highs due to “successful execution of [the company’s] strategic initiatives and the underlying strength of Cinemark’s operating fundamentals.” The CEO also reported that Cinemark outperformed the North American industry box office results in 32 of the past 36 quarters.
Zoradi highlighted four key revenue drivers in the earnings call: luxury recliner seats, premium technology, Movie Club and enhanced food and beverage options. Two key initiatives include a partnership with Yum Brands Inc. (YUM, Financial) subsidiary Pizza Hut and virtual reality, something Zoradi mentioned that “the force is strong with this one.” The CEO announced that Cinemark will add virtual reality to its flagship theater in West Plano this summer, around the release date of The Solo: A Star Wars Story.
Company announces dividend increase
Zoradi said that Cinemark’s board of directors announced a 12 cent increase to the company’s dividend on several factors, including the consistency of financial performance and management confidence in the exhibition industry. The increase in dividend reflects a yield of 3.2%, outperforming at least two-thirds of global competitors.
Cinemark’s share price increased 5.77% as the company reported strong earnings performance and increased its company dividend. The managers at Pioneer Investments (Trades, Portfolio) initiated a 6,541-share stake in Cinemark during the quarter as the company has good growth potential for 2018: GuruFocus ranks Cinemark’s profitability 8 out of 10 and business predictability 3.5 stars out of five.
Disclosure: No positions.
