Go Big, Six Flags

It's forgivable to have slept through this morning's Six Flags (NYSE: SIX  ) earnings report.

The first three months are historically forgettable. Most of the regional amusement park operators' attractions are closed. A chunky loss is a given. The chain generates roughly 6% of the more than $1 billion it will ultimately generate in revenue this year.

However, Six Flags has become fiscally relevant since emerging from bankruptcy last year. The first quarter provides a glimpse into trends that may play out over the course of the year when the stakes -- and turnstile clicks -- are higher.

Six Flags' financials were better than expected, but nothing to tweet home about. Revenue climbed 7% to $61 million. The thrill specialist's deficit of $2.94 a share may seem steep, but it's far less than the $3.54 a share that analysts were targeting.

Fret not, shareholders. This is the new and balance-sheet-improved Six Flags on display. It should be able to more than overcome the first quarter's loss during the next two seasonally potent quarters.

There are also some meaty trends here. It's not as if the few Southern parks that were open during the first three months of 2011 were a lot more crowded this year. Attendance inched a mere 1% higher. It was an 11% pop in admissions and a 10% gain from in-park sales that boosted Six Flags' top-line results.

We'll see if that holds up as the rest of the parks open up during the current quarter.

These are interesting times for the park operators. Rival Cedar Fair (NYSE: FUN  ) reports Thursday, as its executives have been locking horns with the activist investors at Q Funding. Great Wolf Resorts (Nasdaq: WOLF  ) reports tomorrow. The chain of rustic lodges with massive indoor water parks has posted quarterly losses in eight of the past nine periods.

Things are also heating up on the larger theme park stage. Disney (NYSE: DIS  ) reports a week from today, but that's not the big story. Comcast's (Nasdaq: CMCSA  ) majority-owned NBC Universal has to decide in the coming days if it wants to buy Blackstone's (NYSE: BX  ) stake in Universal Orlando or if it will put the entire resort on the bidding block. Attendance soared at Universal Orlando last year after the opening of the richly detailed Wizarding World of Harry Potter at Universal's Islands of Adventure.

Still sleeping? Wake up. Regional parks are just getting started in what promises to be a bumpy season where discretionary income levels, new thrill rides, and gas prices dictate where the winners are queued up.

Would you buy into the amusement park industry ahead of the 2011 season? Share your thoughts in the comment box below.

Walt Disney is a Motley Fool Stock Advisor selection. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Hands up!

Longtime Fool contributor Rick Munarriz loves hitting amusement parks with his family over the summer. His plans are to hit Six Flags Great America, Cedar Point, and Kennywood next month. He does own shares in Disney. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1487182, ~/Articles/ArticleHandler.aspx, 11/24/2014 11:44:08 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement