National CineMedia Earnings: Here’s Why Investors are Ambivalent Now

National CineMedia, Inc. (NASDAQ:NCMI) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company.

National CineMedia, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 46.15% to $0.19 in the quarter versus EPS of $0.13 in the year-earlier quarter.

Revenue: Rose 11.53% to $122.8 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: National CineMedia, Inc. reported adjusted EPS income of $0.19 per share. By that measure, the company beat the mean analyst estimate of $0.18. It beat the average revenue estimate of $119.96 million.

Quoting Management: “Our record Q2 reflected the continued growth of our national and local advertising businesses that benefited from the continued success of our strategies to broaden our client base and digital theatre network,” said Kurt Hall National CineMedia’s Chairman and CEO. Mr. Hall continued, ”We also benefited from operating margin improvements resulting from the operating leverage inherent in our business model, tight cost controls and several theatre acquisitions by our founding member circuits.” Mr. Hall concluded, “With the strength of our first half and strong proposal activity for the second half, we also appear to be benefiting from the steady economic recovery and the impact on the broader media marketplace of increasing DVR adoption and programming fragmentation, making the selling proposition of our expanding national network and engaging theatre environment stronger than ever.”

Key Stats (on next page)…

Revenue increased 49.39% from $82.2 million in the previous quarter. EPS increased to $0.19 in the quarter versus EPS of $0.00 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.29 and has not changed. For the current year, the average estimate has moved down from a profit of $0.68 to a profit of $0.65 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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