Six Flags Tells of Rough Ride in First Half

Shares of Six Flags Inc., owner of the Magic Mountain theme park in Valencia, tumbled 25% on Friday after the company reported lower attendance levels and reduced its cash-flow estimates for the first half of the year.

In a midyear update on its performance, the Oklahoma City-based regional theme park operator told investors that attendance at its 31 parks fell 4% to 12.8 million from 13.3 million in the first half of last year.

The company said it expected revenue of $400 million to $402 million, down $3 million to $5 million from the first six months of 2003, and cash flow of about $30 million, down from $41.8 million. Six Flags will release second-quarter results next month.

Bad weather hurt parks in Chicago, Atlanta and Texas, and a late Memorial Day weekend reduced the number of operating days in the season, Chief Executive Kieran Burke said.

The cloudy outlook was more unwelcome news for a company that has struggled to climb out of an industrywide slump that began with the Sept. 11, 2001, terrorist attacks.

“Oops! They did it again,” Prudential Equity Group analyst Katherine Styponias said in a research note, referring to Six Flags’ continuing problems.

Those problems stand in contrast to the signs of recovery enjoyed by industry leaders Walt Disney Co. and NBC Universal. Their theme park businesses in Florida and California have picked up this year, helped by an economic recovery.

Analysts said Six Flags had been hurt by a lack of reinvestment in new attractions and by its rivals’ new rides.

In California, Disney opened the Tower of Terror ride at California Adventure in Anaheim. And NBC Universal, owned by General Electric Co., launched Revenge of the Mummy -- the Ride and the Van Helsing: Fortress Dracula attractions at its Universal Studios Hollywood park.

After the terrorist attacks, the major destination parks owned by Disney and Universal were the hardest hit by the travel downturn.

Now, those parks, rather than the smaller regional parks, appear to be benefiting the most from an industry recovery, said John Robinett, senior vice president of Economics Research Associates, a leisure industry consulting firm.

“A lot of people who haven’t been to Disney and Universal for the last three years are coming, so I think you’re seeing a bit of displacement from the regional parks,” Robinett said.

Six Flags made the announcement after the close of trading Thursday.

Its shares fell $1.60 to $4.72 on the New York Stock Exchange. They have fallen 37% this year.