Imax Posts Lower Third-Quarter Earnings on Weaker Box Office
The giant-screen exhibitor, led by CEO Richard Gelfond, sees Hollywood box office picking up in the fourth quarter.
Imax on Thursday reported sharply lower third-quarter earnings on weaker box office.
The giant-screen exhibitor, led by CEO Richard Gelfond, reported net income of $4.38 million on overall revenue of $86.5 million. That compares with net income of $10.5 million, on revenue at $85.1 million, for the same period of 2015 when Imax pulled in strong box-office grosses from movies like Jurassic World, Ant-Man and The Transporter Refueled.
Imax posted a per-share profit of 12 cents, beating a Wall Street estimate of 9 cents. "While box office overall was flat versus the third quarter of last year, box office is cyclical and we can expect periods that are stronger than others, such as the first five months of 2016," Imax's Gelfond said in a statement.
Imax signed a record 162 new theater systems during the third quarter and installed 48 new theaters, a company record for the period. But it's the core movie business that softened during the latest quarter.
Domestic box office for Imax was up during the third quarter but was down in China due in part to currency fluctuations and discount ticketing by local cinema operators. Unlike in the U.S. market, China has dynamic cinema ticketing, with prices rising for high-demand movie titles and falling for lower-demand titles.
Imax Entertainment CEO Greg Foster told analysts during a morning call that the impact of dynamic pricing in China will ease when a slew of Hollywood tentpoles reach that market in 2017. He predicted Disney's Beauty and the Beast, Universal's Furious 8 and Michael Bay's Transformers 5 for Paramount will do well in the Chinese market.
"We remain bullish on a long-term outlook for China," he said. Gross box office from digitally remastered film titles was $186.3 million, down 2 percent from $189.8 million in the third quarter of 2015.
And the global per-screen average for digitally remastered titles during the latest quarter was $184,700, down from $220,500 in the year-ago period. Imax forecast Hollywood box office will pick up in the fourth quarter as it looks to release Marvel's Doctor Strange and the Harry Potter spinoff Fantastic Beasts and Where to Find Them.
China has been and remains a major focus for Imax. But the big-screen specialist has been growing its theater network elsewhere, recently unveiling a 25-theater deal with AMC and a five-theater deal with U.K.-based Cineworld Group in Europe.