Cinemark shares helped by outsized 3Q results
LOS ANGELES (AP) — Shares of theater chain owner Cinemark Holdings Inc. treaded water in a declining market Wednesday after its third-quarter earnings results blew past analyst expectations, thanks to strong international attendance and ticket pricing.
Lazard Capital Markets analyst Barton Crockett kept his "Buy" rating on the shares with a $30 price target.
He also raised his estimate for annual earnings before interest, taxes, depreciation and amortization by $9 million to $587 million, due largely to the positive third quarter.
"We see Cinemark as a play on secular growth of the middle class in Brazil and Latin America, where it is the region's leading theater chain, and growth in the U.S., where it is the third-largest chain," Crockett wrote in a research note on Tuesday.
On Tuesday, Cinemark reported third-quarter net income of 41 cents per share, beating the 35 cents expected by analysts polled by FactSet. Revenue fell 1 percent to $633.6 million, but that was still better than the $627 million expected by analysts.
Shares gained 19 cents at $25.60 in midday trading while the Dow Jones industrial average fell 2 percent, dropping below 13,000. Investors were worried about the so-called fiscal cliff of automatic spending cuts facing the newly re-elected President Obama and a Republican Congress, and a deepening recession in Europe.