Imax Posts Second-Quarter Loss, Revenue Falls
Box-office disappointments like 'Pirates of the Caribbean: Dead Men Tell No Tales' and 'King Arthur: Legend of the Sword' pulled down results.
Imax on Wednesday reported a second-quarter loss as the giant-screen exhibitor faced a weaker Hollywood box office.
Led by CEO Richard Gelfond, Imax posted a loss of $1.7 million on overall revenues at $87.8 million. That compared to a year-earlier earnings at $6 million on overall revenue at $91.7 million.
The earnings per-share was a loss of 3 cents, against a year-earlier 9 cents profit. The adjusted earnings per share was 15 cents, which excludes charges and impairments associated with the company's cost-reduction initiative.
Imax missed as analysts forecast $89.3 million in overall revenues. Warner Bros.' Wonder Woman performed on Imax screens, but other tentpoles like Disney’s Pirates of the Caribbean: Dead Men Tell No Tales and Warner Bros.' King Arthur: Legend of the Sword didn't live up to industry expectations.
That was echoed during an analyst call where Imax's Gelfond said several movies "underperformed" expectations during the latest quarter. He looked ahead to a possible halo effect as Christopher Nolan's Dunkirk did better than expected on Imax screens on its opening weekend, pulling in $12 million in box office domestically.
"While we still view that market as a growth driver long-term, a number of titles didn't resonate with filmgoers" during the latest quarter, the exec said of his company's performance in the fast-growing Greater China movie market. Gelfond also pointed to Imax recently laying off around 100 employees as part of its latest corporate restructuring to get costs more in line with overall revenues.
Imax had gross box office globally from digitally remastered film titles at $268.9 million during the latest quarter, compared to a year-earlier $260.8 million. But the per-screen average globally was $237,800, down from $268,200 in the same period last year, mostly due to weaker box office in China.
The domestic box office for digitally remastered titles was $85.9 million, down from a year-earlier $88.8 million. Greater China box office was $97.2 million, against $97.1 million last year, but the per-screen average fell sharply to $235,100 during the second quarter, against $325,300 during the year-earlier period.
"While we entered the year with an optimistic view on full-year box office trends after a disappointing 2016, we clearly underestimated how much of an overreaction to the downside could be in store for Imax shares on a single quarter of weaker-than-expected box office," B. Riley analyst Eric Wold wrote in a recent investors note.
The year-earlier second quarter had Captain America: Civil War and The Jungle Book driving box-office revenues for the large-format exhibitor.