Imax Posts Higher Third Quarter Earnings, Revenue

Richard Gelfond - H 2015
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Richard Gelfond - H 2015

The giant screen exhibitor, led by CEO Richard Gelfond, missed an analyst estimate of 16 cents per share.

Imax Corp. on Wednesday posted an increase in third-quarter revenue and earnings as the giant-screen exhibitor pulled in strong box-office grosses from tentpoles like Jurassic World, Ant-Man and The Transporter Refueled.

Imax, led by CEO Richard Gelfond, reported net income of $10.5 million, compared with a year-ago profit of $5.2 million. Third-quarter revenue jumped to $85.1 million, up 40 percent from a year-earlier $60.7 million.

Imax reported earnings per share from continuing operations at 12 cents, missing the analyst consensus of 16 cents per share. The adjusted earnings per share line was 17 cents, beating the analyst estimate.

The latest results come as Imax looks forward to a fourth quarter with tentpoles like the latest James Bond installment, Spectre, The Hunger Games: Mockingjay Part-2 and Star Wars on its screens. "We believe the combination of our network growth, heightened levels of demand for the Imax Experience and our strong balance sheet will enable us to capitalize on the upcoming fourth quarter film slate as well as the exciting film slates of 2016 and 2017," Gelfond said in a statement.

Imax executives during an analyst call on Wednesday pointed to a possible screening of Star Wars in China on their supersized screens in January. Greg Foster, CEO of Imax Entertainment, said he was "optimistic and hopeful" that Star Wars would play in China, though nothing had yet been confirmed.

The Imax China unit currently has 251 screens in that country. The giant screen exhibitor plans to use a portion of the $248 million it raised in its recent initial public offering on the Hong Kong Stock Exchange to build another 217 theaters in China.

The IPO came despite recent Chinese market volatility, which hasn't yet impacted theater signings in that market, according to Gelfond. "It hasn't done anything negative to us. The tone of the business feels pretty good over there," he said in answer to an analyst query about the Chinese market and its future prospects.

Imax execs also noted they now offered a blend of Hollywood and local language film titles on their screens in China to target a growing fanboy audience, while also having product on hand during blackout periods for foreign titles. "As long as we are covered 52 weeks of the year, we don't care," Foster said.

Imax's third quarter earnings jump also came in part from a continuing theater build-out. Revenue from sales and sales-type leases was $26.6 million during the third quarter, compared to a year-earlier $6.6 million, as Imax installed 12 theaters during the latest frame, against six in the same year-earlier period.

And revenue from joint revenue-sharing theaters was $19.8 million in the quarter, against $15.2 million in 2014. Elsewhere, production and digital remastering revenues was $20.9 million, up from $18.4 million in the same period last year.

The giant-screen exhibitor's third-quarter box office gross was $189.8 million, with a global per-screen average of $220,500.