Entertainment Analyst: Regal Entertainment Earnings Preview

According to analyst Michael Pachter at Wedbush MorganRegal Entertainment (NYSE:RGC) is going to deliver in-line earnings on Thursday.

Here’s Pachter’s bullet points for his preview of Regal Entertainment earnings:

Regal Entertainment (NYSE:RGC) will report its Q1:11 results after the market close on Thursday, April 28, and host a conference call at 1:30pm PT (dial-in: 877-407-0778,  conference ID: Regal Entertainment Group call, webcast: http://www.REGmovies.com).

We expect Q1:11 results in-line with our recently revised estimates for revenue of $589 million and EPS of $(0.07), compared with consensus for revenue of $599 million and EPS of $(0.06). Regal did not provide guidance.

On April 7, we lowered our Q1:11 estimates to reflect weak domestic box office, which was down roughly 20% according to www.boxofficemojo.com. The large decline was due to a difficult comp (from Avatar and Alice in Wonderland) and a series of underwhelming releases. However, in our view, Regal’s admissions revenue likely dropped less than the industry due to its rapid digital rollout and corresponding ticket price increases.

Many high profile releases should drive attendance over the summer. Although several Q1:11 releases were disappointing at the box office (including Drive Angry, Mars Needs Moms, Paul, Red Riding Hood, Sanctum, Season of the Witch, Sucker Punch, and Take Me Home Tonight), many summer releases should perform well due to popular predecessors and heavy anticipation (Cars, Hangover, Harry Potter, Kung Fu Panda, Pirates of the Caribbean, Transformers, and X-Men sequels).

We view Regal’s (NYSE:RGC) commitment to digital as a positive. 3D and IMAX (NASDAQ:IMAX) ticket prices continue to increase, and Regal’s plans to convert screens to these technologies should positively impact sales and margins.

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