SeaWorld (SEAS) Admits Impact from Animal Activism For First Time, FBR Capital Notes

August 13, 2014 9:11 AM EDT
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FBR Capital analyst Barton Crockett weighed in on SeaWorld Entertainment (NYSE: SEAS) which is down 29% following weak Q2 results and outlook. The analyst noted that the results featured the company's first acknowledgement of attendance pressures tied to animal activism.

Crockett notes total revenue of $405.2 million, was down 1.5% year-over-year, and missed their $442.5 million estimate for up 7.6% and FactSet consensus of $447.9 million. The attendance increase of 0.3% fell short of the firm's 4.3% estimate. Total revenue per cap fell 1.8% to $61.54, below their forecast for up 3.2%, with admission revenue per capita down 2.5%, versus our estimate for up 3.6%, and FM&O revenue per capita flat, versus their estimate for a 2.5% increase. Adj. EBITDA was $126.1 million, down 0.7% year-over-year, below our $142.4 million estimate, or up 12.1%, and FactSet consensus of $149.2 million. Adj. EPS was $0.41 versus their $0.56 and FactSet consensus of $0.60.

SeaWorld now sees full-year revenue down 6%-7% year-over-year and adj. EBITDA down 14%-16% year-over-year, versus previous guidance for up 2%-4% and up 3%-6%, respectively.

The analyst noted that SeaWorld attributed soft attendance to "a late start to summer for some schools in the company's key source markets, new attraction offerings at competitor destination parks, and a delay in the opening" of Falcon's Fury, the main new attraction at Busch Garden at Tampa, FL. Additionally, for the first time ever, the company acknowledged attendance pressure tied to animal activism, saying "the company believes attendance in the quarter was impacted by demand pressures related to recent media attention surrounding proposed legislation in the state of California."

The firm maintained a Market Perform rating and price target of $37.00.

For an analyst ratings summary and ratings history on SeaWorld Entertainment click here. For more ratings news on SeaWorld Entertainment click here.

Shares of SeaWorld Entertainment closed at $28.15 yesterday.

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