What happened
Shares of theme park company SeaWorld Entertainment (SEAS 3.40%) rose sharply on Thursday. The stock was up as much as 17.1% but has settled at a gain of 12.2% as of 1:35 p.m. EST.
Bad weather and overly lavish spending on marketing took a toll on SeaWorld's third-quarter results. But investors seem upbeat about the company's full-year adjusted EBITDA guidance and a new CEO.
Image source: Getty Images.
So what
Third-quarter revenue fell 2% year over year to $473.7 million as attendance decreased 2.6%. Adjusted EBITDA declined by 2.6% to $206.9 million.
Though management said it was pleased with its progress on optimizing its business and operations, it was disappointed with its financial results during the period. "We estimate the number of weather days impacting the quarter for our Florida parks increased by almost 50% compared to the prior year quarter," said SeaWorld's interim CEO Marc Swanson. Further, Swanson said the company's operational progress was "masked in the quarter by a significant overspend in marketing expense of approximately $9.5 million related to less disciplined management of certain marketing related costs." The interim CEO said SeaWorld has taken action to address this overspend in order to prevent it from happening in the future.
Now what
Starting Nov. 11, SeaWorld will be led by Sergio Rivera. He was previously chief executive of ILG's vacation ownership segment. He has also served as president of Starwood Hotels & Resorts Worldwide's Americas segment.
Rivera apparently joins SeaWorld at a good time. Management said in its third-quarter earnings call that it now expects full-year adjusted EBITDA to be at the high end of its guidance range.
