Why National CineMedia Shares Are Surging Today

National CineMedia, Inc. NCMI shares are trading higher after the company reported better-than-expected fourth-quarter financial results and announced a $100 million share repurchase program.

Operating revenue stood at $90.9 million, beating the consensus of $81.1 million.

National advertising revenue increased 2% Y/Y to $71.9 million, driven by a 14.1% increase in utilization. However, local and regional advertising revenue fell 5% Y/Y to $16.2 million, owing to lower contract size and activity in the government, electronics, and travel categories.

Operating income declined to $21.3 million from $28.1 million due to increased amortization expenses. 

Adjusted OIBDA decreased to $39.8 million from $42.1 million a year ago, with margin contracted by 210 basis points Y/Y to 43.8%. EPS of $0.24 beat the consensus of $0.09.

Outlook: For the first quarter of 2024, NCM expects revenue of $34.5 million-$35.5 million (vs. consensus of $32.47 million) and adjusted OIBDA loss in the range of $(7.5) million to $(6.5) million.

Tom Lesinski, CEO of NCM said, “In 2023, NCM successfully re-established the importance of cinema for best-in-class advertisers, with movies driving the cultural conversation and the box office reaching its highest point since 2019.”

“We are very encouraged by our strong fourth quarter performance, which led to a 43% increase in active national advertisers and record revenue per attendee. This resulted in strong adjusted OIBDA, significantly exceeding our fourth quarter guide.”

Repurchase: The company’s Board of Directors approved a new share repurchase program authorizing the purchase of up to $100 million through April 1, 2027.

Price Action: NCMI shares are up 20.85% at $5.10 premarket on the last check Tuesday.