Jul 28, 2017
Imax Shares Plunge After Earnings Miss
Imax Corp.'s (IMAX) quarterly earnings missed expectations on Wednesday, July 26, as the large-screen movie company could not overcome this summer's disappointing box office returns.
Even though analysts had dialed back their expectations based on the soft box office, Imax still underwhelmed with $1.7 million in losses, compared with a $6 million profit in the second quarter of 2016. The company's $87.8 million in revenue also paled in comparison with last year's $91.7 million in sales and the projected $89.3 million in revenue, and the exhibition company reported a net loss of 3 cents per share.
On top of poor showings from films such as "The Mummy" and "Transformers: The Last Knight" on large screens, Imax's rough quarter was compounded by recent layoffs and restructuring. The exhibition company also may be suffering from increased competition in the premium moviegoing market. Reclining seats, enhanced concessions and alcoholic beverages are all taking theaters by storm, and audiences can only spend so much money at the movies.
On the quarterly earnings call Wednesday, Imax executives said they would be making changes to the company's strategy going forward. Imax Entertainment CEO Greg Foster said the company would have fewer 3-D showings of films, as the format has become increasingly unpopular. Imax CEO Richard Gelfond added Imax would play films for shorter periods of time.
One film that Imax probably will want to keep for a while is Christopher Nolan's "Dunkirk." The WWII thriller opened to a big $11.7 million on Imax screens, or roughly 23% of the film's opening weekend. (The usual market share for Imax is usually around 10%.) Nolan shot "Dunkirk" using Imax cameras.
"While several films in the second quarter underperformed our expectations, the recent release of Christopher Nolan's 'Dunkirk' emphasizes the value in viewing our business as a portfolio of films," Gelfond said on the call.
Imax shares were down 5.6% on Thursday morning to $20.73.
by Buster Coen