'Deadpool,' 'Batman v Superman' Boost Imax Earnings
The giant-screen exhibitor beat an analyst estimate of earnings of 15 cents per share for its first quarter.
Strong box-office grosses from Hollywood tentpoles like Deadpool and Batman v. Superman helped Imax Corp. on Thursday to post a sharp increase in first-quarter revenue and earnings.
And company execs told a morning analyst call that a combination of Hollywood tentpoles like The Jungle Book and Captain America: Civil War that appeal to families and fan boys promise strong box office from the 2016 slate.
Imax reported net income of $12.2 million for the three months to March 31, up from a profit of $1.5 million in 2015. First-quarter revenue was $92.1 million, up 64 percent from a year-earlier $62.2 million.
During the first quarter, Toronto-based Imax signed contracts for 36 theaters, of which all but one were for new locations, and geographically stretched to China, Japan and India as the giant-screen exhibitor continues to expand worldwide.
The strong quarterly performance was equally sustained by ticket receipts from Hollywood tentpoles. Global box office rose 64 percent to $272 million, with growth in both domestic and international box office.
The average global box office per screen for digitally re-mastered movies in the first quarter was $284,000, compared with $202,900 in the same period of 2015. "The pace of Imax theater signings, installations and box office growth, both domestically and globally, continues to drive real momentum in the business," Imax CEO Richard Gelfond said in a statement ahead of a morning conference call with analysts.
Imax installed another seven theaters in China during the latest quarter, against five in the same period of 2015. Box office from the Imax China unit was $83.4 million in the first quarter, against a year-earlier $63 million, with the per-screen average virtually unchanged at $290,000.
Gelfond told analysts of his continuing optimism for the fast-growing exhibition market in China, despite that country's continuing economic clouds. "While there have been understandable concerns raised about the broader Chinese economy, the cinema as an affordable form of entertainment remains very strong, and on track to pass the U.S. by 2017," he said.
Imax has said it will continue its expansion in the Chinese market with the installation of 100 new screens in 2016. In 2015, the company installed a record 74 giant screens, bringing its country-wide network total to 307 theaters.
On the film front, Gelfond said box office for the second quarter of 2016 is off to a good start, with The Jungle Book generating over $20 million in Imax theaters during its opening weekend, and "strong pre-sales activity" for Captain America: Civil War, which has around 30 minutes of footage shot with dedicated Imax cameras.
Possible 2016 sleeper hits for Imax include Warner Bros.' Suicide Squad and Marvel's Doctor Strange, Greg Foster, CEO of Imax Entertainment, told analysts. Imax is also bullish about Clint Eastwood's Sully, the Miracle-on-the-Hudson biopic starring Tom Hanks as pilot Chesley "Sully" Sullenberger, and which was shot almost entirely with a dedicated Imax camera.
Also on the technology front, Foster told analysts that his company would start employing Imax cameras to shoot local-language Chinese films within the next year. The adjusted earnings per share of 22 cents for the first quarter of 2016 beat an analyst estimate of 15 cents per share.
The giant-screen exhibitor predicted it will release around 44 digitally re-mastered movies in fiscal 2016, with titles like Rogue One: A Star Wars Story and The Legend of Tarzan also on the slate.