Star Wars movie could awaken shares of theater operators
By Devika Krishna Kumar and Anya George Tharakan
(Reuters) - The record-breaking launch of the latest Star Wars movie puts the shares of U.S. theater operators on course for a stellar performance this quarter and beyond, analysts said, as rave reviews pull in die-hard fans and theater-shy audiences alike.
"Star Wars: The Force Awakens" had pulled in about $517 million in worldwide ticket sales through Sunday, according to industry experts, re-establishing the celebrated space saga as a global phenomenon for Walt Disney Co.
"Box office will likely end up around 5 percent higher year-over-year and concessions may grow by 6 percent or more, so it is likely we will see the exhibitors print record earnings in the quarter," Wedbush Securities analyst Michael Pachter said in an email to Reuters.
Fears that the fast-growth of online streaming services such as Netflix Inc would put a permanent dent into ticket sales at U.S. theaters has undermined the share prices of major theater operators this year.
"There's never a sure thing with movies," Barrington Research Associates analyst James Goss told Reuters. "(But) in this case, it was probably as close to a sure thing as there was."
Shares Regal Entertainment Group, AMC Entertainment Holdings Inc, Cinemark Holdings Inc and Carmike Cinemas Inc have fallen between 5 and 15 percent this year, underperforming the S&P 500.
U.S. and Canadian box office revenue fell 5 percent to $10.4 billion in 2014, according to the Motion Picture Association of America.
About 1.27 billion people went to the movies last year, the lowest since 1995, when 1.21 billion turned out, according to the National Association of Theater Owners. Continued...