« August 2007 Model Signals | Main | Cablevision Results Cause Comcast Pain »

August 08, 2007

Box Office Strength Continues

It seems as though everyone is going to the movies to take their minds off the lousy stock market. The weekend box office rose 36% as The Bourne Ultimatum earned $70.1 million, the biggest ever opening for a movie in August and the 28th best opening weekend ever. Bourne also had a bigger opening than any James Bond film. This was the fourth straight weekend the box office has been up and follows on the heels of last weekend when the year over year gain was 48%.

Quarter to date, the box office is now up 17% pulling the year to date gain to 7%. August should continue to produce stellar gains as there are still two movies to be released with high expectations: Rush Hour 3 this coming weekend and Superbad the following weekend. The Bourne Ultimatum should also keep pulling in big bucks as it received stellar reviews and plays well to an older crowd, two things which normally provide good legs.

It seems pretty clear now that the "box office is dead" theory was noting more than a myth. July 2007 was the biggest single month ever, pulling in over $1.3 billion and besting the previous best month by more than 12%. I read somewhere that July also ha the most ticket sales for any month since the 1950s but I can’t verify that fact. This summer will easily break the all-time summer record of $3.8 billion set in 2004 with the final total likely over $4 billion. The year to date gain of 7% comes on top of last year's gain of 4.2%and 2007 should market the second consecutive year of higher ticket sales after three straight declines....

All of this is good news for theatre companies including major exhibitors like Regal Entertainment (RGC) . RGC shares carry a current yield of over 5% and 3Q estimates look like they could be way too low. The leading theatre advertising company, National Cinemedia (NCMI) reports on Thursday. I expect their 2Q be less impacted by the weaker than expected 2Q box office as theatre advertising budgets are growing rapidly and should be less impacted by monthly fluctuations in box office. NCMI's report might lead investors to focus on the current box office strength to the benefit of RGC.

Posted by Steve Birenberg at August 8, 2007 02:00 PM in Box Office