Regal’s Shares Fall on Results

Regal Entertainment Group, the largest U.S. movie theater chain, posted quarterly results Monday that fell short of analysts’ estimates and sent its stock price down 5.6%.

Ticket prices rose less than expected because more children’s films played in Regal theaters. Admission fees for children are less than those for adults.

Janco Partners analyst Matthew Harrigan said the earnings’ miss was “not an indication of a systemic problem,” but he said he was not surprised that Regal’s shares dropped.

“If the movie product continues to be strong ... there is no reason the stock can’t move higher,” he said.

Second-quarter net income fell to $16.6 million, or 11 cents a share, from $26.4 million, or 17 cents, a year earlier, as the company paid down debt. Revenue rose 6.5% to $684.6 million.

Excluding one-time items, earnings were 23 cents a share. On that basis, analysts’ average forecast was 27 cents a share on revenue of $687.4 million, according to Reuters Estimates.

Chief Financial Officer Amy Miles told analysts on a conference call that the company was “still comfortable” with its previous forecast for $550 million in earnings before interest, taxes, depreciation and amortization for fiscal 2006.

Attendance at Regal theaters rose 6.6% during the quarter, with the average ticket price rising 1.2% to $6.94 from $6.86. Average concession sales per patron rose 1.4% to $2.84 from $2.80.

Regal operates 6,383 screens in 542 locations in 40 states and the District of Columbia.

Ticket prices rose less than expected in the second quarter as 32% of the films shown were family-oriented and commanded lower children’s admission prices, Miles said. A year earlier, the figure was 20%.

Regal Chief Executive Michael Campbell told analysts that second-quarter results tracked increases in the movie theater industry overall. Both box-office revenue and attendance rose 6.5% per screen compared with last summer’s disappointing results.

Campbell said Regal was “very pleased” so far with the current quarter results, which have been buoyed by the box-office smash “Pirates of the Caribbean: Dead Man’s Chest” and a strong performance last weekend by “Miami Vice.”

He said the current quarter would benefit from a larger slate of September releases -- 17 films compared with 12 in September 2005.

Campbell said the company was “more optimistic regarding box-office potential in the fourth quarter,” when films scheduled for release include the James Bond adventure “Casino Royale” and “Charlotte’s Web,” starring Julia Roberts and Dakota Fanning.

Shares of Knoxville, Tenn.-based Regal fell $1.16 on Monday to $19.66.