SeaWorld Entertainment (SEAS) Stock Advancing in After-Hours Trading Today After Naming New CEO

SeaWorld Entertainment (SEAS) stock is up in after-hours trading after the company named a new CEO.

Author:: Amanda Schiavo
Publish date:: Mar 19, 2015 4:32 PM EDT

NEW YORK (TheStreet) --Shares of SeaWorld Entertainment Inc. (SEAS) - Get Report are higher by 3.61% to $19.80 in after-hours trading on Thursday, following the marine mammal theme park's announcement that it has named Joel Manby as its new president and CEO effective Tuesday, April 7.

"The Board of Directors has completed an extensive search process and we are extremely pleased to welcome Joel Manby to SeaWorld Entertainment. Joel has nearly 20 years' experience and a proven track record with business models very similar to ours - multiple brands and multiple properties in the entertainment and theme park industries," interim CEO David D'Alessandro said in a statement released this afternoon.

D'Alessandro took over as interim CEO when former CEO James Atchison stepped down earlier this year.

"Even in the most challenging business environments, Joel has consistently enhanced the performance of the companies he has led for customers, investors and employees alike. He has the experience and qualifications to lead our company into the future," D'Alessandro continued.

Manby has previously served as president and CEO of the largest family-owned theme park and entertainment company in the U.S., Herschend Enterprises, driving profitable growth, expanding the company from six to 26 properties and doubling annual EBITDA and net cash flow, SeaWorld said.

SeaWorld has been under near constant scrutiny since the release of the 2013 film Blackfish. The documentary highlights the 2010 death of one of SeaWorld Orlando's veteran trainers, suggesting the event was not an isolated incident and that captivity is physically and mentally damaging to the company's star attraction, performing killer whales (orcas).

In February 2010 Dawn Brancheau was killed when Tilikum, a 12,000 pound bull orca, grabbed and pulled her into his tank.

In its last earnings release SeaWorld reported a continuing decline in attendance.

Critics of the film call Blackfish "propaganda," saying it ignores all of SeaWorld's positive attributes, such as its wild animal rescue efforts.

SeaWorld has also recently launched a new marketing campaign designed to show how their parks offer unique opportunities to experience close encounters with marine life. Over the summer SeaWorld announced plans to enlarge its orca habitats.

Separately, TheStreet Ratings team rates SEAWORLD ENTERTAINMENT INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate SEAWORLD ENTERTAINMENT INC (SEAS) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

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

The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 96.2% when compared to the same quarter one year ago, falling from -$12.97 million to -$25.45 million.
The gross profit margin for SEAWORLD ENTERTAINMENT INC is currently lower than what is desirable, coming in at 28.15%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -9.61% is significantly below that of the industry average.
Net operating cash flow has significantly decreased to -$8.41 million or 162.38% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 42.30%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 107.14% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
SEAWORLD ENTERTAINMENT INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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 ($0.86 versus $0.58).
You can view the full analysis from the report here: SEAS Ratings Report