Shares of movie theater operators fall after holiday weekend sales disappoint

Movie theater shares down after holiday weekend

SEATTLE — Shares of movie theater operators dropped Tuesday after a disappointing holiday weekend at the box office.

Merriman Curhan Ford analyst Eric Wold wrote in a client note that U.S. box office sales of $186.2 million were 12.1 percent higher than in the same period last year — but they were 14 percent lower than last year’s Memorial Day weekend. In 2009, Memorial Day fell a week earlier.

That brings the total for the second quarter so far to $1.65 billion, a 3.7 percent decline from last year. The decline, along with overall market weakness, has weighed on shares of Regal Entertainment Group, Cinemark Holdings Inc. and Carmike Cinemas Inc.

But the analyst noted that the last time movie theater shares were this weak, they rebounded significantly three and six months following the bottom. He said he expects box office trends to improve in the second half of the year and the number of 3-D movie screens to increase.

Tony Wible, an analyst at Janney Capital Markets, wrote in a note to investors that many of the big movies released in 2010 have been disappointing.

The top movie of the weekend, “Shrek Forever After” from DreamWorks Animation SKG Inc., generated $55.7 million in box office revenue, a 21 percent drop from the previous weekend. “Sex and the City 2″ brought in $51.3 million over the holiday weekend, compared with $57 million for the first “Sex and the City” movie in May 2008.

Wible also cited “Iron Man 2″ and “Clash of the Titans” among those that performed worse than expected.

Shares of Regal Entertainment fell $1.14, or 7.6 percent, to $13.92 in afternoon trading. Carmike Cinemas stock dropped 91 cents, or 8.2 percent, to $10.19. Cinemark Holdings Inc. shares dropped $1.13, or 7.1 percent, to $14.86.

Shares of Imax Corp. slipped 17 cents to $16.78. Imax operates 3-D theaters that command higher ticket prices.