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Imax on Tuesday posted earnings for the three months to Dec. 31, 2018, at $1.7 million, or an adjusted 26 cents per share, against a year-earlier profit of $4.83 million or 34 cents per share, on overall revenues of $108.9 million, down from a year-earlier $125.6 million.
Analysts had estimated Imax would post fourth-quarter earnings at 24 cents per share, on overall revenues of $102.5 million.
And the adjusted EBITDA, at $36.4 million, surpassed a market consensus of $35.6 million. Imax’s bottom line was hit by a one-time charge of $8.38 million for exit costs and restructuring charges, related mostly to the closure of a virtual reality arcades business, against similar one-time charges of only $2.47 million taken in the fourth quarter of 2017.
The profit projections beat for the latest three months marked the 11th quarter in a row that Imax has surpassed analyst expectations for per-share earnings and EBITIDA.
“We believe our achievements last year set the stage for Imax to have a blockbuster year in 2019. We further differentiated The IMAX Experience, increased awareness of the Imax brand and tackled key challenges in China, where we delivered our strongest box office year ever and doubled the industry growth rate,” Imax CEO Richard Gelfond said in a statement.
On an analyst call, Gelfond explained how his company was leveraging its presence in China. “Last year, we refined our programming strategy by introducing more local language films into the slate, working more closely with key ticketing platforms in China and launching a new brand campaign,” he recounted.
The Imax boss said his company is discussing closer ties with Maoyan, a major movie ticket sales platform in China, to allow for better managing of the large-format exhibitor’s customer relationships in that market.
Imax is programming three films on its screens at any one time in China. Even during the busy Chinese New year period, when Wanda’s sci-fi epic The Wandering Earth set a new record as Imax’s highest-grossing local-language title, the giant-screen exhibitor also screened two other local titles, Crazy Alien and Pegasus.
Year-to-date, Imax box office in China has reached $78 million, up 61 percent compared to last year, ahead of The Lion King, Toy Story 4, the It sequel and other Hollywood titles playing on Imax screens in that Asian market.
During the latest quarter, gross box office from Imax’s digitally remastered (DMR) films came to $236.7 million in the fourth quarter, down from a year-earlier $278.1 million, when the company had a stronger film slate that included Star Wars: The Last Jedi.
The domestic box office for Imax was $82 million, down from a year-earlier $117 million, while the Greater China box office was $69 million, up from $63 million during the same period of 2017, after Imax chose to screen more local-language movies in that market.
Imax DMR revenues were $25.2 million, compared to $31.7 million in the fourth quarter of 2017. New business revenue for the latest quarter was $800,000, against $13 million in the year-ago period when Imax participated in the launch of Marvel’s Inhumans series.
The Toronto-based company has since chosen to get out of new ventures like TV series investment and VR arcades as it focuses on its core giant-screen movie business.
Gelfond told analysts that, overall, Imax is doing a better job of differentiating its moviegoing experience as it faces more competition for consumer eyeballs from streamers and other new digital offerings.
“Beginning in 2017, we made a series of strategic decisions to turn around our business. From top to bottom, the evidence is clear in 2018 that these initiatives are working as our growth, margin and return metrics are on solidly positive trend lines. We have confidence each of these trends will continue in 2019, and our margin and return improvement should accelerate as we continue to execute against the initiatives we laid out,” the exec asserted, with an eye to investors.
Feb. 26, 2:30 p.m. Updated with comments by Imax CEO Richard Gelfond made during an analyst call.