High-flying blockbusters like “Doctor Strange in the Multiverse of Madness” and “Top Gun: Maverick” lifted IMAX earnings during the most recent fiscal quarter.
Revenue at the company famous for its immersive, wide screen technology increased 45% to $74 million, up from $51 million in the prior-year period. Despite the box office rebound, the company still operated in the red. IMAX recorded a net loss of $2.9 million or 5 cents per share, which was an improvement on the net loss of $9.2 million or 16 cents per share that IMAX reported in the year-ago quarter. Adjusted net income stood at $3.9 million or 7 cents per share. Gross margin improved to $44 million from $25.6 million in 2021
IMAX’s revenue results beat Wall Street projections, but earnings per share missed the mark. Analysts expected IMAX to record revenue of $73.7 million and adjusted earnings per share of 13 cents.
In the end, it all came down to the movies. With COVID concerns waning and safety restrictions lifting, more people flocked to the multiplex to see escapist fare in the recent quarter.
That meant that for first time in the company’s history, IMAX scored three $25 million-plus global openings thanks to the release of “Doctor Strange in the Multiverse of Madness”, “Top Gun: Maverick” and “Jurassic World Dominion.” But the company thrives on popcorn fare, and the fall is noticeably lacking in the kind of broadly appealing movies that drive ticket sales.
“It is no longer a question of whether global consumers will come back to the cinema for
blockbuster movies,” Richard L. Gelfond, CEO of IMAX Corporation, enthused on a conference call with analysts after earnings were announced. “They are back. It’s not just superhero fans. It’s not just millennials and Gen Z. It’s movie fans of every demographic, in every region around the world, turning out for films across virtually every genre.”
But there were setbacks, namely China, where COVID-related lockdowns took a chunk out of ticket sales and led to a $3.2 million write-down.
Gelfond said that the situation is improving and that 91% of IMAX theaters in the country are operational. He also noted that some Chinese films such as “Detectives vs Sleuths” and “Mozart from Space” have been embraced by audiences and said that a few Hollywood blockbusters, namely “Jurassic World Dominion,” have done well.
“The environment in China remains challenging, but we are beginning to see some early encouraging signs,” he told investors.
The company reported cash and cash equivalents of $110.1 million and total debt of $230 million as of June 30, 2022.
IMAX’s stock was up more than 2.75% in after-hours trading.