Six Flags at half-mast after Q2 miss
By William Spain, CBS.MarketWatch.comNEW YORK (CBS.MW) -- Shares in Six Flags quickly went to half-mast Tuesday, screaming down over 50 percent after the company missed second-quarter estimates and gave a gloomy forecast.
After the bell Monday, the amusement park operator reported a net loss of $11.5 million, or 12 cents per share -- a sharp turnaround from net income of $7.7 million and 8 cents in the year ago period. Excluding an extraordinary loss, the company had net income of $12.6 million, or 8 cents a share -- exactly half the consensus estimate of analysts polled by Thomson Financial/First Call.
The stock plunged $6.59, or over 55 percent to $5.27
The pitiful results were driven by bad weather in some markets and soft group sales, the company said, and the situation only got worse last month.
According to Six Flags CEO Kieran Burke, "we experienced a sharp fall-off in attendance and revenues in July, concentrated at three parks. We believe this attendance decline reflects a number of factors, including some reaction to economic uncertainties, as well as potential terrorism fears early in the month."
Attendance was off by about 11 percent, though per capita spending rose 9 percent. Total revenue came in at $348 million, down from $356 million.
While "per capita spending gains have continued to be quite strong," July revenue came up short of 2001 levels by about 6 percent system-wide. "Our revenue decline through the end of July is attributable to the poor performance of three parks, with the economy constraining other parks from outperforming expectations to offset the shortfall," he said.
Burke said the company has "seen an improved trend in performance over the last two weeks" and is hopeful that will continue but "we cannot definitively estimate our full-year performance at this time do not believe that we will achieve our full year performance goals."Burke did not give a specific per-share net forecast but said that earnings before interest, taxes, depreciation and amortization "is likely to be in line with prior year."Analysts were tripping over each other to pull the trigger on Six Flags after the numbers came out, with Prudential Financial, Goldman Sachs and Salomon Smith Barney among those downgrading the stock.
Bear Stearns Jason Ader cut Six Flags from "buy" to "neutral," noting that this is "the third season in a row of missed expectations and no material change in earnings since 2000."
Ader sees "little long-term growth in the company's core business and therefore ... the stock warrants more of a trading strategy on the seasonality of the shares, rather than a buy-and-hold approach."
The share price drop put a small hole in the pocket of the world's richest man; Microsoft Chairman Bill Gates owns about 8.6 percent of the company.
Shares in Six Flags rival Cedar Fair (FUN: news, chart, profile) were also under pressure, losing over 6 percent to $21.90.
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Tim 
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