Shares of Cinemark Holdings (NYSE: CNK) gained 15.7% in February 2018, according to data from S&P Global Market Intelligence. The movie theater chain smashed Wall Street's earnings estimates in last month's fourth-quarter report, and investors reacted with a big sigh of relief.
In the fourth quarter, Cinemark's GAAP (generally accepted accounting principles) earnings rose 24% year over year to $0.82 per share. The average analyst would have settled for $0.47 per share. On the top line, revenues increased 7% to $750 million, just ahead of the Street's $745 million target.
In all fairness, analysts had not been counting on a one-time $45 million tax benefit in this quarter, skewing the per-share result $0.39 higher. Without this taxation quirk, Cinemark would have seen adjusted earnings of $0.43 per share.
Image source: Cinemark.
Cinemark's fourth quarter enjoyed the launch of another shoo-in Star Wars blockbuster, paving the way to a 0.8% year-over-year attendance boost despite significantly higher ticket and concession prices. The first quarter also looks good thanks to the record-breaking Black Panther premiere, and 2018 promises a generally promising film slate.
That being said, I still don't see myself owning Cinemark shares anytime soon, as the cinema sector at large is fighting for its very life against streaming video services and high-quality home theater systems.
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