How Will SeaWorld Entertainment (SEAS) Stock React to Earnings Results?
NEW YORK (TheStreet) -- SeaWorld Entertainment (SEAS) - Get Report is scheduled to release its 2015 third quarter earnings results before the market open on Thursday morning.
Analysts are expecting that the company, which showcases performing marine mammals, will report a year over year rise in both earnings per share and revenue for the most recent quarter.
SeaWorld has been forecast to report earnings of $1.18 per share on revenue of $509.46 million for the three month period ending in September.
The company's earnings came in at $1 per share on revenue of $495.83 million for the 2014 third quarter.
Investors will likely be keeping a close eye on SeaWorld's attendance numbers, which have been struggling as a result of allegations that the company mistreats the animals at its theme parks. Most notably the company's star attractions, performing killer whales.
Recently, SeaWorld's request to expand its killer whale habitat at its California park was approved with the caveat that the company no longer breed the massive mammals. A practice the company has faced intense scrutiny over.
SeaWorld has vowed to fight the decision by the California Coastal Commission.
Separately, TheStreet Ratings team rates SEAWORLD ENTERTAINMENT INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
We rate SEAWORLD ENTERTAINMENT INC (SEAS) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SEAS, with its decline in revenue, slightly underperformed the industry average of 1.2%. Since the same quarter one year prior, revenues slightly dropped by 3.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 43.23% is the gross profit margin for SEAWORLD ENTERTAINMENT INC which we consider to be strong. Regardless of SEAS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SEAS's net profit margin of 1.48% is significantly lower than the industry average.
- After a year of stock price fluctuations, the net result is that SEAS's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
- The debt-to-equity ratio is very high at 3.30 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.33, which clearly demonstrates the inability to cover short-term cash needs.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Hotels, Restaurants & Leisure industry and the overall market, SEAWORLD ENTERTAINMENT INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: SEAS