National Cinemedia Sinks 10% On Worse-Than-Feared 4Q Loss, Sales Plunge 89%


Shares of National Cinemedia dropped 9.7% in Monday’s extended trading session after it posted a wider-than-expected loss in the fourth quarter. The American cinema advertising company’s revenues declined 89.3% year-over-year, impacted by the closure of theatres due to the pandemic.

National Cinemedia (NCMI) incurred a loss of $0.62 per share in 4Q, compared to the $0.17 loss per share estimated by analysts. Total sales generated in the quarter amounted to $15.7 million, topping analysts’ expectations of $14.55 million.

The total attendance in 4Q was 12.4 million, down 91.9% year-over-year. The company’s adjusted OIBDA was a loss of $9.9 million, compared to income of $83.5 million in the prior-year period. Further, total advertising revenue (excluding beverage) plunged 89.2% year-over-year.

The company did not provide 2021 guidance, citing the continued uncertainty related to the COVID-19 pandemic.

National Cinemedia CEO Tom Lesinski said, “Having now weathered the worst of the COVID-19 storm, I am confident that 2021 will be a year of rebirth for our cinema partners and NCM as we expect our high margin business model to once again begin to generate free cash flow growth and dividend appreciation for our stockholders.” (See National Cinemedia stock analysis on TipRanks)

The company also announced a decreased quarterly cash dividend of $0.05 per share, down 28.6%. The reduced dividend will be paid on April 5, to shareholders of record as of March 22. The company’s annual dividend of $0.20 per share now reflects a dividend yield of 4.2%.

On March 8, B.Riley Financial analyst Eric Wold reiterated a Buy rating and a price target of $6 (26% upside potential) on the stock. The analyst said, “We remain positive on the outlook for the industry as moviegoers increasingly return to theaters over the next 12-24 months.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 1 Buy and 2 Holds. The average analyst price target of $4.83 implies 1.5% upside potential to current levels. Shares have increased 15.5% over the past six months.

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