“Jurassic World: Fallen Kingdom,” “Avengers: Infinity War,” and other summer blockbusters goosed profits at Imax. The exhibition company reported earnings of 30 cents per share for the three-month period ending June 30, handily beating Wall Street’s expectations. However, revenues missed the mark. Imax reported income of $98.3 million, falling short of the $98.9 million that analysts were projecting.
Both figures improved upon the year-ago results. In the prior-year quarter, Imax logged a loss of 3 cents a share and revenues of $87.8 million. That wasn’t the only piece of good news. Imax’s adjusted EBITDA of $39.5 million represented a 35% increase from the second quarter in 2017. Net income came in at $7.6 million compared to a loss of $1.7 million.
Imax, with its vast screens and wider projection, has become a favored platform for fanboys and fangirls looking to experience comic book movies and special effects-fueled popcorn fare in a more immersive setting. That’s helped it benefit from the movie business’ greater emphasis on superhero flicks and action franchises.
There have been plenty of those films this summer, a deluge of sequels and spinoffs that’s resulted in a record second quarter box office. That aided Imax, which said its healthier results were attributable to robust ticket sales. Imax’s cut of the box office from the films it re-formatted to fit its screens was $36.2 million, up from $27.8 million in the prior-year period. That off-set a slight decline in theater installations. Revenues for that business segment were $30.9 million, compared with $32.7 million in the same quarter in 2017.
Some analysts believe that the second half of the year will be a rocky one for the movie business. Unlike previous years, there’s no Star Wars sequel or spinoff to close out the year, and it’s unclear if blockbuster hopefuls such as “Fantastic Beasts: The Crimes of Grindelwald” and “Aquaman” will fill the void left by the lack of a Jedi installment. Yet, Imax chief Rich Gelfond thinks the company is diversified enough to withstand any downturn. He notes that Imax has local language films scheduled to screen in its locations in South Korea, India, and China.
“I always say predicting movies is like predicting the weather — it’s a dangerous business,” said Gelfond. “But we should be well positioned because of our global slate.”
Imax also signaled it is ready to profit from Saudi Arabia’s decision to end a three-decade-long ban on movie theaters. In May, Imax installed its first commercial theater in the Kingdom in conjunction with Vox Cinemas. Gelfond said he sees parallels between Saudi Arabia and China, another country that recently experienced a massive boom in theater construction.
“There’s a lot of exhibitors going into the market and most, if not all, of them have been in touch with us,” said Gelfond.
Imax’s stock was up 2.22% at $23.05 in after-hours trading.