SeaWorld Entertainment Inc (NYSE:SEAS) is a theme park and entertainment company that owns and operates 11 theme parks in the United States, including five of the country’s top 20 theme parks as measured by attendance. Its diversified brand portfolio includes SeaWorld, Busch Gardens, and Shamu, among others. The company has a strong competitive position with its well-known diverse brands, differentiated theme parks, and some of the world’s largest zoological collections. SeaWorld creates a high entry barrier with its huge animal collection and zoological expertise. Further, long development lead-times and high initial capital investment for theme park development lift the barrier for other competitors even higher.
Narrower loss for the first quarter
SeaWorld Entertainment Inc (NYSE:SEAS) reported a narrow loss for the first quarter of 2013 on May 22 due to a 12% increase in revenue. The company lost $0.49 per-share for the quarter, an improvement compared to a $0.55 per-share loss for the same quarter in 2012. Admission revenue and revenue from food, merchandise and other sources were up 14% and 9%, respectively. The management had also controlled expenses well, with expenses increasing only 5%.
Looking forward
As for the guidance, the company expects its full-year revenue to land in the range of $1.46 billion to $1.49 billion with adjusted EBIDTA in the range of $430 million to $440 million. Historically, the company incurs a net loss in the first and fourth quarters due to the seasonal nature of its business, while about two-thirds of the full year attendance and revenue are generated in the second and third quarters.
SeaWorld continues to deliver new attractions. “Antarctica: Empire of the Penguin,” which opened in late May, is SeaWorld Entertainment Inc (NYSE:SEAS) Orlando’s largest expansion ever and features new ride technology and a penguin habitat as well as an underwater viewing gallery. The company is also preparing to open its new Aquatica Park in San Diego on June 1, a park that was acquired in 2012 and rebranded.
Strategically, SeaWorld continues to open and operate companion parks near one another to reduce overhead costs while creating cross-selling opportunities. With a development strategy that is planned and executed well and premium offerings plus new and exciting attractions, SeaWorld is expected to increase its admission and in-park revenues to achieve continuous revenue growth.
Competition
SeaWorld Entertainment Inc (NYSE:SEAS) competes with other theme park operators, including Six Flags Entertainment Corp (NYSE:SIX) and The Walt Disney Company (NYSE:DIS). While Six Flags Entertainment Corp (NYSE:SIX) focuses on operating regional theme, water and zoological parks, Walt Disney is a much more diversified media and entertainment company. The Walt Disney Company (NYSE:DIS)’s parks and resorts segment operates the The Walt Disney Company (NYSE:DIS) Resorts globally.
Six Flags Entertainment Corp (NYSE:SIX) had delivered a strong first quarter and reported record revenue. The company had been growing its revenue steadily in the past few years and continues to invest heavily, with its capital expenditures standing at around 9% of revenue. Its recent facility development is highlighted with SkyScreamer at Six Flags Entertainment Corp (NYSE:SIX) Over Georgia. The outlook for Six Flags Entertainment Corp (NYSE:SIX) remains bright with increasing traffic and per capita spending.
Earlier in May, Disney’s theme parks and resorts segment delivered its largest profit growth, up 73% to $383 million. The revenue was boosted with higher prices for admission tickets and in-park food and beverages, as well as longer visitor stays in the resorts. With solid branding power, Disney is expected to benefit strongly as the economy continues to improve.
Bottom line
As the latest IPO in the theme park industry, SeaWorld gives investors more options to invest in this highly capital intensive industry. The value of theme parks is to provide enjoyable experiences and memorable moments for families and visitors. Each with its own unique theme and geographic location, SeaWorld’s addition to the industry should help capture more attentions from investors while adding limited competitions to the existing players. Overall, more long-term growth is expected for SeaWorld as it continues to expand with its distinctive edges.
Nick Chiu has no position in any stocks mentioned. The Motley Fool recommends The Walt Disney Company (NYSE:DIS). The Motley Fool owns shares of Walt Disney.
The article Summer Time Is SeaWorld Time originally appeared on Fool.com.
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