Despite being entrenched in a recession, Americans are buying movie tickets.
Ticket sales this year are up 17.5 percent, to $1.7 billion, according to box-office tracking company, Media by Numbers.
The box-office surge started just before Christmas with the comedy “Marley & Me,” in which Jennifer Aniston was upstaged by a dog. And it has continued, weekend by weekend, with little sign of let-up, analysts say.
In 1982, theater attendance jumped 10.1 percent to about 1.18 billion (the top seller was “E.T.: The Extra-Terrestrial”) as unemployment rose sharply past 10 percent. Then admissions fell nearly 12 percent, an unusually sharp drop, in 1985 (the “Back to the Future” year), as the economy picked up — suggesting that theater owners have sometimes found fortunes in times of distress, and distress in good times.
Our Buzz Stock of the Day — Carmike Cinemas, Inc. (Nasdaq: CKEC) — is a U.S. leader in digital cinema and 3D cinema deployments and one of the nation’s largest motion picture exhibitors. As of December 31, 2008, Carmike had 250 theatres with 2,287 screens in 36 states. Carmike’s digital cinema footprint reaches 2,157 screens, of which 452 were also equipped with 3D capability. Carmike’s focus for its theatre locations is small to mid-sized communities with populations of fewer than 100,000.
Merriman Curhan Ford analyst Eric Wold recently reiterated his “Buy” rating Carmike shares, saying that the companies’ domestic box office revenues rose 9 percent to 10 percent in the first quarter despite a lineup of movies that he considered “fairly lackluster.”
He also thinks that Carmike is benefiting from its operation of 500 3-D movie screens, which accounts for about 21 percent of its total screens and 25 percent of the total 3-D screens in the U.S.
The Columbus, Ga.-based cinema owner and operator (NASDAQ: CKEC) reported Monday a net loss of $41.4 million and a loss per share of $3.27, compared with a net loss of $126.9 million and a loss per share of $10.07 in 2007.
Revenue dipped about 2 percent to $474.4 million.
Attendance went from 55.1 million in 2007 to 49.9 million in 2008.
“We finished 2008 with a solid fourth quarter, highlighted by a 10 percent increase in theater level cash flow, compared to the year-ago quarter,” said Carmike Cinemas Chairman David Passman, in an earnings release.
Carmike is also one of a few companies that is poised to profit from an uptick in the number of 3-d movies that are released.
“We are pleased with the positive response throughout our circuit to 3D films. Over the past few years Carmike has converted 2,157 of our screens to digital cinema and built a leadership position in 3D installations. As a result, Carmike now has the largest installed base of 3D screens of any domestic exhibitor. We believe we are well positioned to benefit from a growing pipeline of high profile 3D content planned for 2009 and beyond.”
Carmike generates about $25 million of operating cash flow on revenue of $474 million. The company has had year-over-year quarterly revenue growth of 1.5 percent, and shares trade near their 52-week low.