Loews see low as 1st qtr. loss hits $21.9 mil, stock drops 8%

Cineplex merger, box office contribute to decline

By MARC GRASER

HOLLYWOOD -- Film exhibitor Loews Cineplex Entertainment Corp. watched its stock plunge 8% on Thursday as the company reported a worse-than-expected first-quarter loss of $21.9 million, compared with $743,000 for the same period last year, due to its merger with Cineplex Odeon.

Revenues for the New York-based company, however, were up to $202 million, compared with first quarter earnings of $118 million last year, for the period ended May 31.

Prexy-CEO Lawrence Ruisi attributed the first-quarter results to merger-related items, including increased amortization of good will, the depreciation of Cineplex assets and higher interest expense. Loews Cineplex Entertainment was formed by the May 1998 merger of Sony's Loews Theaters unit and the Cineplex Odeon Corp.

The combined chain operates 415 theaters and 2,900 screens throughout the United States, Canada and Europe.

Hits missed

Ruisi added that box office performance suffered from a lack of hit movies, resulting in "an unfavorable comparison to last year's performance of 'Titanic.'

"Although the box office showed improvement in May, the favorable performance of 'Star Wars: Episode 1 -- The Phantom Menace' was associated with unusually high film rental costs, resulting in a significant impact on the operating cash flow in this quarter," he reported.

Shares of Loews Cineplex Entertainment fell $0.88 to close at $10.