NEW YORK — General Cinema’s parent, GC Companies Inc., saw its net profit drop by half in the June quarter to $3.9 million as a result of the poor performance of early-summer film releases, it said Tuesday.
The third-quarter earnings result was cushioned slightly by GC’s investment activities, which recorded a slight increase in profit to $1.1 million. General Cinema’s operating earnings, before interest and taxes, dropped 54% to $7 million on 10% lower revenue of $123.1 million.
Much of the exhibition industry suffered a downturn in earnings in the June quarter because so many of the early-summer releases burned out quickly. General Cinema’s admissions revenue fell 14% to $82.1 million, highlighting the downturn in attendance.
“Our theater business financial results were affected by a disappointing response to this year’s summer film offerings,” said GC Companies president Robert Smith.
He said the quarterly result would not sway GC from “executing our long-term strategic plan,” which is to build “high-impact, state-of-the-art megaplex theaters in densely populated urban and suburban areas and closing or selling older, less profitable units.”
GC expects to open 57 screens in five theaters by the end of 1997, Smith said. GC stock fell 69¢ to $39.37.