SeaWorld Hopes to Make Some Serious Shamu-la

If there are killer gains to be found in killer whales, we'll find out tomorrow afternoon when SeaWorld Entertainment (NYSE: SEAS  ) reports its latest quarterly results.

SeaWorld went public at $27 in April, and it's been a splash with investors. The stock has moved 33% higher since its debut, but most of those gains came on its first day of trading.

Investors are still trying to get a handle on SeaWorld, wondering where it fits when stacked against regional amusement park operators Cedar Fair (NYSE: FUN  ) and Six Flags (NYSE: SIX  ) .

SeaWorld is growing faster. Revenue clocked in 12% higher in its first quarter as a public company back in May. Cedar Fair and Six Flags have been growing at a clip in the single digits.

However, maintaining all of the marine life at its namesake parks and the animals at Busch Gardens doesn't come cheap. SeaWorld's guidance for all of 2013 issued back in May calls for adjusted EBITDA in the range of $430 million to $440 million on $1.46 billion to $1.49 billion in revenue. We're looking at adjusted EBITDA margins of 28.9% to 30.1%. Six Flags and Cedar Fair, on the other hand, are perched on adjusted EBITDA margins just north of 35%.

Investors are fine with that, as long as they see SeaWorld's investments in growth initiatives pay off.

A big bet was made in Sea World Orlando earlier this year with a unique attraction that takes riders through a penguin-themed habitat. It was a rough start. Guests were dissatisfied with the long lines at Antarctica: Empire of the Penguin, and some of the penguins even managed to escape from their habitats. These things happen, especially in attractions where live animals are involved.

As a public company, SeaWorld will have to face the good and the bad of being a public company. The good news is that brand awareness should increase. There's also something to be said for the ambassadorial nature of being a shareholder. If you own SeaWorld, you're more likely to visit one of the parks and recommend visits to friends than if you're not.

However, there's also the dark side of having to keep up with the market's quarterly expectations.

Sources were telling park enthusiast website Screamscape.com last month that SeaWorld Orlando was starting to open certain attractions earlier in the day and closing others early. It's a delicate balance between saving money on operations and not inconveniencing guests. There have also been reports this summer of show cancellations and the closing of a simulator ride at Busch Gardens Williamsburg.

All of this naturally leads us at the feeding station of tomorrow's quarterly report and, just as importantly, the guidance for the rest of the seasonally potent summer.

SeaWorld's come a long way in a short time as a public company. It would be a shame to see shareholders get all wet tomorrow.

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