The Most Important Question Heading Into Regal Entertainment's Q3 Report

B. Riley expects Regal Entertainment Group's (NYSE: RGC) earnings in line with consensus amid double-digit box office gains.

The company is set to report its third quarter financial results on October 27. Analyst Eric Wold expects earnings of $0.26 a share on revenue of $804.9 million.

“Our RGC model assumes a relatively conservative per screen box office increase of +11.3%, which is 80 bps below the industry gain of +12.1%, which we believe provides for adequate wiggle room for the period,” Wold wrote in a note.

Wold noted that Regal Entertainment is rolling out theater-level enhancements and likely had a high number of screens “out of commission” during the third quarter expecting a stronger film slate in the fourth quarter.

At the call, the key focus should be on the update on circuit’s theater enhancement strategy and ability to reach/exceed the goal of 30 percent of the circuit converted by year-end 2017.

The analyst wouldn't be surprised on the company’s declaration of another year-end extraordinary dividend in the coming weeks, albeit at a lower rate than last time given higher capex spending plans.

Wold has a Neutral rating on Regal Entertainment shares, with a price target of $23.

At time of writing, shares of Regal Entertainment were up 0.81 percent to $22.92.