Regal Entertainment Profit Declines 37%

The nation’s largest theater operator, Regal Entertainment Group, posted a 37% drop in its third-quarter profit, blaming slow box-office sales and bad weather for the downturn.

Regal reported net income of $27.8 million, or 19 cents a share, down from $44.2 million, or 30 cents, a year earlier.

Quarterly revenue was off slightly, to $611.3 million from $629.9 million last year.

Regal Chief Financial Officer Amy Miles said the company’s disappointing results were a reflection of a weak summer box office.

She added that, unlike last year, receipts from the week leading up to the July 4 box-office weekend fell into the company’s fiscal second quarter.

“I don’t think our results were a surprise,” she said.

Overall domestic ticket sales were up nearly 4% this summer, with admissions down nearly 2%, according to box-office tracking firm Exhibitor Relations.

Last year, theater grosses were buoyed by such late-summer hits as “Pirates of the Caribbean: The Curse of the Black Pearl.”

Besides citing slow summer ticket sales, analysts said the company’s third-quarter decline in profit reflected the effect of Florida’s unusual spate of hurricanes -- 11% of Regal’s theaters are located in the state.

“All theater owners are at the mercy of the film product released and everyone is at the mercy of weather,” said Jeffrey Logsdon, an analyst with Harris Nesbitt Corp. “It does not reflect on management of the company.”

Despite the downturn, Regal’s shares rose 51 cents, or 3%, to $19.75 on the New York Stock Exchange.

“There is a certain amount of volatility with the Hollywood box office,” said Michael Savner, an analyst with Banc of America Securities. “I think their stock performance is more indicative of their underlying performance.”

Knoxville, Tenn.-based Regal operates 6,242 screens in 560 locations, including the Regal, United Artists and Edwards chains.