Stock Alert: Six Flags Entertainment Drops 20%

Shares of Six Flags Entertainment Corp. (SIX) are losing more than 20 percent in the morning trade on Thursday at $30.73, after the theme park operator reported a loss for the fourth quarter, and cut its quarterly dividend by nearly 70 percent.

Further, the company said it is facing challenges related to its base business and warned that soft organic revenue trends as well as increasing operating cost headwinds, primarily related to higher minimum and market wages, will be difficult to overcome in 2020.

The stock has traded in a range of $29.98 to $59.52 in the past 52 weeks.

The company’s fourth-quarter net loss was $11.16 million or $0.13 per share, compared to net income of $79.42 million or $0.93 per share in the year-ago period. Revenue declined 3 percent to $261.00 million from $269.50 million last year, primarily due to a 3 percent decrease in attendance as well as a 1 percent decrease in sponsorship, international agreements, and accommodations revenue.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.15 per share on revenues of $260.11 million. Analysts’ estimates typically exclude special items.

For fiscal 2020, Six Entertainment expects adjusted EBITDA in a range of $435 million to $465 million. The company’s board of directors recommended a reduced first quarter cash dividend of $0.25 per common share, down from $0.83 per share previously.

The company also announced the retirement of its chief financial officer Marshall Barber at the end of August.

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