IMAX revenues surge on box office, China returns in Q1
By Todd Cunningham, TheWrap
Imax (IMAX) revenues climbed 29% to $62 million in the first quarter of this year behind a stronger-than-expected domestic box office and solid returns from China and abroad, the company reported Thursday.
While the revenues were up from $48.2 million last year, first quarter earnings for the giant-screen chain fell. Net income was $391,000, down from $579,000 a year ago and earnings per share were at zero, down from one cent per share a year ago. That reflected the company’s aggressive growth strategy and the introduction of its laser projection technology, and was in line with analysts’ expectations.
Box office grosses hit $166 million, up 20% from 2014’s first quarter, and that was the key. China powered a strong foreign performance that drove 64% of that total, and the surprise blockbuster “American Sniper” from Warner Bros. and Disney’s “Cinderella” led the domestic returns.
IMAX finalized long-term deals with both studios in the quarter, and each of the hit films were examples of new strategies. The company’s 11th-hour shift to “American Sniper” was part of its efforts to be nimbler in its programming, and the Disney fairy tale update was one of several alternative offerings designed to broaden its audience base.
Chief Executive Richard Gelfond said he thought IMAX was well positioned and gathering steam as it heads into the summer movie season.
“With record results from ‘Furious 7’ in April and a great start to the ‘Avengers’ sequel internationally, the momentum has continued into the second quarter,” he said.
“Avengers: Age of Ultron,” which opens Friday, kicks off a string of summer blockbusters including “Terminator: Genisys,” “Jurassic World” and Mission: Impossible – Rogue Nation,” that are expected to drive record returns. The epic sequels are right in the wheelhouse of the giant screen chain, which caters to fan boys and action aficionados willing to pay premium prices for high-end viewing experiences.
IMAX stock has risen 27% in the past 12 months. Based on its China strategy and the expected box office bonanza this summer and in 2016, analysts are bullish. Shares were down nearly a dollar, to $36.58, immediately following the report on Thursday.
China will soon become the company’s largest market and is the primary growth driver for IMAX, but Gelfond declined to comment on a potential China IMAX public offering in remarks following the report.
He dismissed the notion that timing for the IPO would be significantly affected by the government there, and he noted that despite 40-percent growth in its China network over the past year, the per-screen averages have remained constant.
Production and digital re-mastering revenues were $17.7 million, up from $15.2 million a year ago.
Revenue from sales and leases was $8.6 million in the first quarter of 2015, compared to $4.5 million in the first quarter of 2014, reflecting the installation of five theater systems, compared to three last year. There were 403 theaters in backlog, compared to 431 in backlog at this time last year, and the total network consisted of 943 systems globally.
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