Why Six Flags' Shares Soared

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of theme-park operator Six Flags (NYS: SIX) were on a sugar high today, gaining as much as 30% in intraday trading after the company announced strong second-quarter earnings.

So what: For the quarter, Six Flags reported record revenue of $375 million and delivered earnings per share of $1.27. This time last year, the company managed just $0.65 in earnings per share. The results blew away analysts' estimates, which called for $0.62 in per-share profit on $352 million in revenue.


Where did analysts miss the boat on this quarter? It seems as if they weren't quite bullish enough on seeing consumers rush back to enjoy the spring and early summer at Six Flags parks. Though guest spending per head was down slightly from last year, park attendance increased by 1 million, or 12%, versus 2011.

Now what: Consumers have been getting pinched in a tough economy, but if Six Flags' numbers are any sign, they're not willing to live the Spartan lifestyle. With $4 in trailing-12-month cash earnings and a $2.40 annual dividend, Six Flags shares at $56 may be worth digging into further. Of course, investors won't want to overlook the fact that it was just two years ago that the company emerged from bankruptcy.

Want to keep up to date on Six Flags?Add it to your Watchlist.

The article Why Six Flags' Shares Soared originally appeared on Fool.com.

Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributorMatt Koppenhefferhas no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter,@KoppTheFool, or onFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.

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