Weak Canuck showing, older theaters cited
Loews Cineplex Entertainment warned Wall Street Wednesday that impending third quarter results will be disappointing due to a weaker showing at its Canadian unit and a drop in attendance at its older theaters.
The exhibitor said cash flow for the three months ended Nov. 30 was about flat with the $29 million or so it posted the year before as net losses widened to at least $17 million from $12 million. The steeper net loss was due mostly to tax considerations. The lackluster cash flow, however, came in large part from Canada where the studios most closely affiliated with Cineplex Odeon — Universal, Sony and Fox — failed to fire up the box office.
“All of the film product that did well was from the others,” noted one Loews insider, speaking of Paramount, Warner Bros. and Disney, which supply product to Cineplex competitor, Famous Players. That chain is owned by Par and Warner.
Older is not better
The other issue was a decline in Loews Cineplex’s older theaters in the last three months — a dip which is particularly evident in periods when overall attendance slows due to less overall film product as well as in areas where Loews doesn’t have a strong market position.
A Loews Cineplex spokeswoman said that problem is being addressed in several ways by Loews and its competitors. The industry is aggressively shuttering older theaters and many exhibs have started reining in overaggressive expansion plans. Loews is opening new sites but its growth has been relatively restrained compared with some of its peers.
Future looks brighter
The company’s CEO Larry Ruisi, however, said things will brighten up and that the third quarter figures, which have not yet been released, “should not be taken as an indication of the results which will be experienced for the remainder of the fiscal year.” He anticipates fresh holiday product and the opening of six new Loews Cineplex megaplex theaters during the rest of fiscal 2000.
The company’s shares, which have taken a beating along with the rest of the group in recent months, fell 25¢ to close at $6.25.