Six Flags Entertainment Q3 Earnings: Revenue Beats, Merger Synergies, Strong Q4 Expectations & More

Benzinga11-06

Six Flags Entertainment Corporation (NYSE:FUN) shares are trading higher on Wednesday.

The company reported third-quarter adjusted earnings per share of $2.10, missing the street view of $3.39. Quarterly sales of $1.348 billion outpaced the analyst consensus estimate of $1.339 billion.

Operating days in the quarter totaled 2,585, compared with 1,091 last year. About 1,591 of the additional operating days were contributed by the legacy Six Flags operations added in the merger.

On July 1, legacy Cedar Fair and legacy Six Flags closed the merger transactions to form the new combined company Six Flags Entertainment Corporation.

Adjusted EBITDA, which the management notes as a meaningful measure of park-level operating results, increased $170 million to $558 million.

“While extreme weather and other operating disruptions at critical points during the third quarter impacted our financial results, consumer demand for our parks remained strong during normalized operating conditions,” said Six Flags President and CEO Richard A. Zimmerman. 

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The company stated that by the end of 2024, it expects to achieve $50 million in run-rate cost synergies and is already working towards the remaining $70 million in cost savings, which it aims to realize by the end of 2025.

Liquidity as of September 29 totaled $743 million, including cash on hand and available borrowings under the combined company’s revolving credit facility.

While planning to reinvest in its parks to improve the guest experience and boost attendance, the company intends to fund these initiatives through additional cost savings across the portfolio, ensuring it retains 100% of the realized synergies.

Based on the strength of October’s performance, management now expects the combined company to be on pace to achieve fourth-quarter Adjusted EBITDA of $205 million – $215 million.

Six Flags noted that as part of Project Accelerate, it has established a new annual unlevered pre-tax free cash flow target of at least $800 million by 2027.

Price Action: FUN shares are trading higher by 9.57% to $46.62 at last check Wednesday.

Image via Shutterstock

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