SeaWorld (SEAS) Stock Falls On Plan to Phase Out California Killer Whale Shows

SeaWorld (SEAS) stock closed down on Monday after the company announced it would phase out its killer whale show at its San Diego park.
By Amanda Albright ,

NEW YORK (TheStreet) -- SeaWorld Entertainment (SEAS) - Get Report stock closed down by 1.27% to $17.91 on heavy trading volume Monday, after the entertainment company announced that it would end its killer whale shows at its San Diego property.

The company has faced widespread scrutiny after a 2013 documentary, Blackfish, criticized SeaWorld's treatment of the whales. The company will phase out the park's current whale performance due to guests' changing tastes, CEO Joel Manby said, The New York Times reports.

"We didn't do anything in San Diego because of the activists," Manby said at an investor meeting. "We did it because we're hearing it from our guests."

SeaWorld has initiated production on a new killer whale presentation for the park, which "will engage and inform guests by highlighting more of the species' natural behaviors," the company said in a statement.

"The show will include conservation messaging and tips guests can take home with them to make a difference for orcas in the wild," the statement said.

By the end of the day, 4.62 million shares of SeaWorld had traded, versus its 30-day average of 1.78 million shares.

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 increase in net income, revenue growth and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Hotels, Restaurants & Leisure industry average. The net income increased by 12.4% when compared to the same quarter one year prior, going from $87.18 million to $97.95 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 1.5%. Since the same quarter one year prior, revenues slightly increased by 0.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for SEAWORLD ENTERTAINMENT INC is rather high; currently it is at 52.93%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.71% is above that of the industry average.
  • SEAWORLD ENTERTAINMENT INC has improved earnings per share by 14.0% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, SEAWORLD ENTERTAINMENT INC reported lower earnings of $0.58 versus $0.59 in the prior year. This year, the market expects an improvement in earnings ($0.75 versus $0.58).
  • In its most recent trading session, SEAS has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • You can view the full analysis from the report here: SEAS

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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