Imax Earnings Rise on 'Spider-Man,' Asian Hits

Spider-Man Far From Home-Publicity Still 2- H 2019
Columbia Pictures/Photofest

The giant-screen exhibitor, led by CEO Richard Gelfond, pointed to a strong mix of Hollywood and local-language Asian-market movies.

Giant-screen exhibitor Imax on Thursday reported higher third-quarter earnings, due largely to a strong Hollywood and local-language film slate.

Imax reported earnings attributable to shareholders of $9 million, up 80 percent from a year-earlier $5 million. The adjusted earnings per share came to 21 cents, compared with 14 cents per share in the year-ago period, beating analysts' consensus forecast of 20 cents.

Quarterly revenue rose 5 percent to $86.4 million, compared with $82.1 million a year earlier, and fell just shy of the analyst forecast for $87.6 million.

The third-quarter film release slate at Imax had a balance of Hollywood blockbusters like Spider-Man: Far From Home and The Lion King and local-language films like the Chinese animated hit Ne Zha, which reached $35.5 million at the box office during the latest three months, and the Japanese hit Weathering With You.

Imax's global box office rose 19 percent to $246.1 million, against $206.5 million last year, with domestic box office during the latest quarter rising 23 percent to $76.5 million, while the greater China box office was $76.4 million and the rest of the world box office was $93.2 million.

Imax continues to bet heavily on China, even as rising trade and tariff tensions between the U.S. and the Asian country worry investors. "We're having an extremely good year in China," Imax CEO Richard Gelfond told analysts during a morning call, as he pointed to enhanced marketing and a stronger movie slate, both in local-language and Hollywood titles, as key revenue drivers.

He added local-language Chinese titles increasingly have higher production budgets and varying genres, including animated fare, for overall better quality offerings.

Gelfond also discussed his backing for AMC's Stubs A-List and other cinema-chain movie-subscription services. "We've concluded that it's helped us in terms of revenue and attendance. To the extent any of these plans provide a subsidy or incentive to go to Imax, they seem to be working and moving people into the premium category. It's early, but we're feeling positive," he told analysts.

The giant-screen exhibitor's commercial theater network grew 9 percent in size, with signings across the U.S., the U.K., France, India, Japan, Malaysia, the Middle East and elsewhere, as Imax remains a standard bearer in the large-format business.

"We are on track for our best year ever at the global box office," said Gelfond in a statement that accompanied Imax's latest financial results. "In China our box office is up 27 percent in [local currency] through early October, and we recently grew our box office by more than 160 percent during the pivotal National Day holiday. And we look forward to the highly anticipated Star Wars: The Rise of Skywalker, the final installment of the Star Wars saga, in December." 

Next year, Imax plans a record number of releases filmed using its proprietary cameras, including No Time to Die, Wonder Woman 1984 and Christopher Nolan's Tenet as the company works to get more Hollywood directors to shoot in its giant-screen format. Imax also forecast low double-digit growth in its global box office for 2019 over the $1.03 billion in global box office it had reported for 2018.

Imax is also working to bring streaming platform movies from Netflix, Amazon Studios and others onto its giant screens, and its supersized movies to streaming services in the U.S., Europe and Asia via its new Imax Enhanced home cinema product, which offers digitally remastered 4K movies with DTS audio.

An example is Spider-Man, which Sony released into theaters. It's been upgraded with Imax's DNA and wider aspect ratio when viewed on FandangoNOW. "It fills the screen more than its letterbox," Gelfond told The Hollywood Reporter.

Tencent Video, FandangoNOW, Privilege 4K and Rakuten TV have begun streaming the first Imax Enhanced titles from Sony Pictures Home Entertainment and Paramount Pictures, and Gelfond anticipates upstart streaming services from the Hollywood studios will eventually offer Imax movie titles after they are up and running.

As Amazon and Netflix do more theatrical plays for their movies, Imax is continuing to talk with streaming giants to supersize their releases for its own screens. Imax will release the Eddie Redmayne and Felicity Jones-starrer The Aeronauts on its U.K. screens starting Nov. 7.

At the same time, mindful of pushback from traditional exhibitors — as when the sequel Crouching Tiger, Hidden Dragon: The Green Legend in 2015 launched simultaneously on Netflix and in select Imax venues — Imax insists it will respect the theatrical window. The large-format exhibitor is releasing The Aeronauts in the U.K. next week because Amazon Studios is respecting the traditional theatrical window in that market.

Otherwise, Gelfond said Imax is waiting for the major exhibitors and Hollywood studios to set new ground rules for movie-windowing before routinely bringing streaming movies onto its screens. "Whatever they agree to, we're going to respect," Gelfond told THR as Imax remains on the sidelines.

Oct. 31, 7:30 a.m. Updated with comments Imax CEO Richard Gelfond made to THR and on an analyst call.