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Imax Revenues Fall, Earnings Rise

Imax has emerged unscathed from the recent box office downturn.

The big screen company saw revenues dip slightly, but earning rise in the second quarter of 2014. Imax profits rose 12% to $13.3 million, or 19 cents per diluted share, for the three months ending in June, while revenue fell 3% to $79.1 million.

That was roughly in line with Wall Street projections. Analysts expected the company to announce earnings of 19 cents per share, although revenue was shy of the $81.1 million predictions.

The domestic box office is down 20% from the previous summer, and Imax CEO Richard Gelfond acknowledged on a conference call with analysts Thursday that the company has looked abroad to boost profits. Fifty seven percent of its box office for the quarter came internationally.

“The movies overall have not performed domestically as well as expected which has impacted our per screen averages,” said Gelfond.

“Some of the films just aren’t working the way people envisioned,” he added, attributing the downturn to a sputtering U.S. economy, sequel fatigue and stronger than expected ratings for World Cup.

He noted, however, that China has emerged as a major source of strength for the company thanks to the more than 170 screens it currently maintains in the People’s Republic. The company recently signed a deal with Shanghai Film Corp. to open 19 new screens in the country and will launch more than 240 screens over the next five years.

“Transformers: Age of Extinction” has shattered records for an Imax release in China and has earned roughly $300 million in the country alone, Gelfond said.

“With this film we are all witnessing the power of the Chinese box office,” said Gelfond.

Imax had 24 new theater signings and revenue share arrangements, ten fewer than the year ago period. Its network of theater chains now stands at 868, counting both commercial multiplexes and institutional theaters, up from 767  in the same quarter the previous year.

The company said it has announced 26 titles that it will release in 2014, the usual suspects include such tentpole films as  “Godzilla” and “Transformers: Age of Extinction.” It expects to come close to matching the 38 titles it fielded in 2013.

Gelfond predicted great things for next week’s release of “Guardians of the Galaxy,” saying that though most people “don’t have it on their radar screen,” he expects it to be a big hit.

The Imax chief was also bullish on the cavalcade of popcorn films unspooling in 2015 and 2016 — a list that includes sequels to “Star Wars,” “The Avengers,” “Jurassic Par” and James Bond. J.J. Abrams recently announced he plans to film portions of the seventh “Star Wars” using Imax cameras.

“It’s an impressive slate of films that line up with the Imax fanbase,” said Gelfond.

Imax’s stock closed down 2.3% on Wednesday at $24.69.

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