Major exhibitor Regal Entertainment Group blamed a “challenging box office environment” in the third quarter for a 74% plunge in earnings per share to 7 cents in the period, compared with 27 cents in the same period in 2016.

Revenue also slumped 12% to $716 million compared with $811.5 million a year ago for the quarter ending September 30.

The company noted that the quarter included a $10.7 million after-tax gain on the sale of Regal’s stake in Open Road Films.

Notwithstanding the box office issues, “we were pleased that our ongoing focus on customer amenities had a positive impact on our market share and operating metrics, including significant growth in both average ticket price and concession sales per patron,” said Regal CEO Amy Miles. “Looking ahead, we are optimistic regarding the potential for box office success during the upcoming holiday season and throughout 2018.”

Studios and exhibitors have been confronting some soft openings on key titles of late, with expectations building for November and December, which will need to hit a very high level to put 2017 into the black.

During a conference call with analysts, Miles noted that the quarterly results, while down from the year-earlier quarter, outpaced Wall Street expectations. She said three main factors helped push the results above expectations: the company’s large screens, reclining chairs and the performance of recently acquired screens.

Miles was asked about the incursion of Netflix into the movie space. The streaming service plans to release 80 films in 2018, part of a $7 billion to $8 billion content spending spree. Don’t look for any of them to play on Regal’s 7,000-plus screens, though. “We have plenty of content from our studio partners,” Miles said. ” When we’re thinking about how to best allocate our screens, we allocate to individuals who best market and make movies for the big screen.”

Regarding the Open Road investment, Miles reflected on the six-year span when the company retained its stake and said circumstances had changed during that time. “It was clear to us that they would need additional capital and that they would take on further production risks,” she said. “We didn’t have the appetite for that additional risk.”
Leo Kulp, an analyst with RBC Capital Markets, issued a report after the call calling the quarterly results “strong.” The numbers exceeded his expectations, he said, due to “better attendance monetization and strong cost controls.”
The company’s shares surged more than 3% in after-market trading. During the session, they gained a fraction to end the day at $16.35.

Along with the quarterly results, Regal said its board declared a cash dividend of 22 cents per Class A and Class B common share, payable on December 15 to stockholders of record on December 4.