HOLLYWOOD — Large-format film rivals Imax and Iwerks Entertainment reported lower earnings Thursday for their third and first quarters, respectively, with Imax shares receiving a boost in price from news it will expand its big screens into China.
Toronto-based Imax reported third-quarter profits of $3.2 million, compared with $7.1 million a year ago, while revenues dropped 4% to $42.5 million.
The drop was primarily due to a fall in systems revenue as Imax delivered fewer theater systems this quarter than in the year before.
Revs from film, the company’s new focus, more than doubled to $11 million from $5.3 million last year.
Imax shares climbed 10.34% to C$32.00, a gain of C$3.00, on the Toronto Stock Exchange. In New York, the company rose $3.56 to close at $22.88, a gain of 18%.
Expanding to China
In the quarter ending September 30, Imax inked contracts for nine Imax theater systems valued at $28.9 million, which include theaters in Egypt and Shanghai.
Earlier this week, Imax inked a pact with government-backed Shanghai ScienceLand for two theaters to open in China in 2001 — a potential gold mine. Imax, which already has a theater set to open in Shanghai late next year and another operating in Hong Kong, said it hoped to open two more theaters, one in southern China and one in Beijing.
“Operationally the film and theater contracts we signed in the quarter will help us continue to expand our global theater network,” said Brad Wechsler, Imax’s co-chief executive officer. “We’re particularly pleased about the increased activity in Asia and our initial forays into China.”
Iwerks’ bumpy ride
Iwerks, which also operates film ride simulations and other specialty venues, reported a slight improvement in first-quarter revenues, posting $7.6 million for the period ended Sept. 30. Last year, it generated $7.4 million.
The Burbank, Calif.,-based company, however, continued to report a net loss of $1.6 million, including $420,000 from its touring operation.
Iwerks experienced a 46% boost in hardware sales to $1.3 million
“We also remain optimistic with our continuing strong sales in Asia and our growing prospects in Europe and elsewhere in the world,” Iwerks prexy and CEO Charles Goldwater said.
Iwerks operates more than 250 location-based attractions in 38 countries worldwide.
Iwerks shares remained unchanged at 75¢.