Regal lowers sights on third-qtr. results

By MARTIN PEERS

NEW YORK --- Regal Cinemas Inc. became the second major exhib in the past week to lower expectations about the third quarter, disclosing that its earnings would be below expectations because of worse-than-expected film product.

Regal stock dropped $1.75 to $24.94 on the news. Regal shares had fallen $2 to $27.56 last week, after Carmike Cinemas Inc. revealed its earnings wouldn't meet Wall Street estimates.

Regal execs had not been available for interview over the past week, but in a statement issued Wednesday afternoon, the company said it expected to report earnings of 39¢ to 40¢ a share for the September quarter, below the 47¢ a share "consensus" estimate of Wall Street analysts.

Even at the lower number, Regal's profit will still be higher than a year ago. But Regal chairman Michael Campbell said the third-quarter earnings would be "affected primarily" by third-quarter film product that "has not been as strong as originally expected."

He added that earnings will be affected by accounting treatment of Regal's recently acquired Cobb Theaters. Regal is expected to elaborate on its views in a conference call for Wall Street analysts today.

Regal and Carmike are not alone in their gloomier predictions, although no other exhib has made any public announcements about expectations for the quarter. But Cineplex Odeon Corp. execs confirmed last week the exhib had not enjoyed as strong a quarter as it expected, at least so far.

Cineplex CFO Ellis Jacob and VP for marketing and communications Howard Lichtman said July was a "down month" and August was up, but for the two months together Cineplex's revenue was flat with last year.