National CineMedia, which emerged from Chapter 11 bankruptcy last summer, drew cheers from investors Monday after an encouraging fourth-quarter earnings report.
The company’s shares were up 17% in after-market trading based on the quarterly numbers, which were marked by a small but notable uptick in national advertising during the quarter. The twin strikes of 2023 have hampered gallery profits recently, and those challenges plus the bankruptcy process have left a mark on the financials.
Total revenue in the quarter ended Dec. 28 fell a fraction to $90.9 million, compared to $91.7 million in the same period a year earlier. National advertising revenue rose 2% to $71.9 million, with a 14.1% usage gain offsetting a 6% decline in attendance. Across the media sector, companies reported dismal results from advertising in the quarter, putting NCMI in a small group of black index companies.
Operating income in the quarter fell to $21.3 million from $28.1 million in the same quarter last year, but exceeded internal expectations. On a diluted basis, earnings per share fell to 24 cents from 60 cents in the 2022 period.
“We are very encouraged by our strong performance in the fourth quarter, which resulted in a 43% increase in active national advertisers and record revenue per attendee,” CEO Tom Lesinski said in the company’s earnings release. “What remains clear is that the biggest brands continue to turn to NCM as a reliable and effective way to reach millions of young and diverse moviegoers.”
National CineMedia is sticking with Noovie, the pre-show suite brand it introduced in 2017. In an annual report on its 2023 performance filed with the Securities and Exchange Commission along with its quarterly financials, NCM said that as of year-end, Noovie was It represents 65% of its total ad network. The Noovie mix includes a “platinum” ad that runs between trailers just before the feature premieres, the filing noted.