Citing strong performance by blockbuster films, Imax Corp. has reported a 12.6% gain in fourth-quarter earnings to $27.3 million and a 16.5% hike in revenues to $119.3 million.
Wall Street was nevertheless disappointed by the performance. Imax released the report after the stock market closed Wednesday; shares fell 10% to $29.75 in after-hours trading as the earnings of 39 cents a share came in below the analyst consensus of 43 cents a share.
Revenues came in above the consensus forecast of $115.8 million. Imax CEO Richard L. Gelfond issued a bullish outlook as part of the report. “Imax is clearly benefiting from a global trend in the film industry to make more big-budget blockbuster movies,” he said. “And with so many major movie franchises releasing important sequels in 2016 and 2017, we believe we’re extremely well positioned for success in the years ahead.”
Imax did not single out “Star Wars: The Force Awakens,” which began its run on Dec. 16 and has topped $2 billion in worldwide box office, in the report. But Gelfond noted during the subsequent earnings call with analysts that the seventh “Star Wars” movie had generated 12% of the box office from 2% of the locations and had set an opening weekend Imax record of $48 million worldwide on 677 screens, beating the “Jurassic World” record of $44.1 million.
Gelfond noted that “The Force Awakens,” “Deadpool” and “Kung Fu Panda 3” have led to a strong first-quarter box office, adding that moviegoers are becoming more accustomed to expecting blockbusters.
“The saying ‘go big or go home’ has never been more appropriate,” he said. “I don’t think anyone would have predicted such a strong start to the 2016 release year.”
Gelfond concluded the call by saying, “I’ve never felt better about our business in the 22 years I’ve been here.”
The company also reported a fourth-quarter global per-screen average of $318,600, up 9% over the year-earlier period.
Revenue from joint revenue-sharing arrangements surged 40% to $31.9 million in the quarter. Imax installed 32 new theaters under joint revenue-sharing arrangements and had 529 theaters operating under joint revenue-sharing arrangements as of Dec. 31, compared to 451 theaters one year prior.
Fourth-quarter box office sales gained 27.1% to $288.4 million, with 54% from international sites.
For the full year, Imax reported a 13.2% hike in 2015 per-screen average to $1,155,800. The full-year installation total grew to 154 systems, of which 18 were upgrades, compared with 121 and eight in 2014, and lifted the total Imax network to 1,061 systems as of Dec. 31, of which 943 were in commercial multiplexes.
Imax also said it signed contracts for 138 theaters in 2015 in 24 countries, resulting in a backlog of 372 theater systems. The company raised its guidance for theater installations this year to between 135 and 140, up from the previous range of 115 to 120.
“As we look to 2016, we are very encouraged by what we see in the marketplace regarding our network expansion opportunities not only in China, but in other strategically important markets such as Japan, the Middle East and continental Europe,” said Gelfond. “With more than 1,000 theaters in our global network, $1 billion in box office running through our screens, and more than $300 million in cash and virtually no debt, we believe we have significant opportunities to take our company to the next level.”
Gelfond also said during the call that it plans to increase its investments in content, which could include live events, original movies or TV.