If you were planning to head out to New Jersey to check out the world's fastest roller coaster, take your time. Six Flags (NYSE:PKS) announced that the new Kingda Ka thrill ride at its Great Adventure amusement park has been out of commission for a week now, and that repairs are underway.
The gargantuan coaster's buggy start is likely to hurt attendance at that particular park, but Six Flags isn't worried. It still expects to close out the year with $300 million in adjusted earnings before scooping out debt interest, depreciation, and amortization. While the end result will still be another annual loss for the regional amusement park operator, $300 million in fake profitability is still better than last year's $258.6 million in fake profitability.
Hitting a top speed of 128 miles per hour as it catapults riders up and barely over a 456-foot-high steel tower, Kingda Ka opened last month, but a smooth freshman season seemed unlikely. Cedar Fair (NYSE:FUN) opened a similar -- yet slightly smaller -- version of the ride two years ago and it, too, suffered from significant downtime early in its tenure.
Thankfully, Six Flags is riding a wave of favorable momentum these days. Season pass sales at its collection of parks are up by 18%, with actual attendance up a respectable 4.4% so far this year. That was the good news behind yesterday's announcement. Coaster enthusiasts? Well, if you go by the Six Flags website, the ride is expected to remain closed for several weeks.
Even before it was granted the record-setting coaster, Great Adventure was one of Six Flags' more prolific parks, with 2.8 million guests going through the turnstiles last year. Kingda Ka arrived packing a wallop of marketing muscle, but the park was certainly doing just fine without it. With attendance traditionally peaking at the seasonal parks in July, there is still time for Kingda Ka to help Six Flags roar into a summer to remember. Now, if those Roller Coaster Tycoon mechanics could only put away their lunch pails and get this monster ride back up and running, park enthusiasts and Six Flags investors would all be happier.
Kingda Ka is down, but these headlines remain open:
- Cedar Fair and Six Flags posted solid revenue growth this past quarter, although expenses could have been kinder.
- In the summer of 2003, Top-Thrill Dragster also had its operating hiccups.
- Talk about your favorite thrill rides in our Roller Coaster Loving Fools discussion board.
Longtime Fool contributor Rick Munarriz has been known to chase a few coasters with his family over the summer. Last week he had no problem conquering the country's other most anticipated new coaster -- SheiKra at Busch Gardens in Tampa, Fla. He owns shares in Six Flags, as well as units in Cedar Fair. The Fool has a strict disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
