Editor’s Note: This post is breaking and will be updated
IMAX (IMAX) reported its fiscal second quarter earnings on Thursday after market close as a healthy summer box office season helped the company deliver strong top-line growth, with revenue up 45% year-over-year.
Here are IMAX’s second quarter results compared to Wall Street’s consensus estimates, as compiled by Bloomberg:
“Doctor Strange in the Multiverse of Madness,” “Top Gun: Maverick” and “Jurassic World: Dominion” helped lift overall box office performance in the second quarter, with global box office totals reaching $247.7 million, an increase of 128% year-over-year.
Gross margins also improved to $44 million, up from $25.6 million in the year-ago period.
The stock climbed in after-hours trading, up about 3%.
“With three consecutive $25 million-plus global openings for the first time in its history, IMAX continued to affirm its position as a critical launch platform for major entertainment franchises,” IMAX CEO Richard Gelfond said in the earnings release.
The executive cited upcoming titles like Brad Pitt’s “Bullet Train,” Dwayne ‘The Rock’ Johnson’s “Black Adam,” “Black Panther: Wakanda Forever” and “Avatar: The Way of Water” as driving forces of growth for the back half of the year.
Last month, Beijing and Shanghai — key markets for the international box office — announced it would start to reopen after about two months of intense lockdowns that forced citizens to remain indoors.
The second quarter suffered the brunt of those lockdowns as most theaters in the region remained shuttered; however, the company reveled that 91% of IMAX screens are currently operating in the country— up from 65% on April 26.
China box office receipts fell 46% in the quarter, contributing a mere 11% to the global total.
On the earnings call, investors will want more clarity on China re-openings amid an increase of COVID-19 case counts.
Coupled with the possibility of more lockdowns overseas, Bloomberg Intelligence noted that other risks for the second half of the year include an impending recession (which could derail the number of new theater installations), as well as a slowdown in second-half theatrical releases.
Nevertheless, IMAX plans to expand its worldwide reach by releasing 15 local language titles across 50 global markets in the third quarter.
‘For quality, people will pay up’
As consumers continue to battle inflation, IMAX is confident that a downturn won’t sour demand.
Gelfond revealed to Yahoo Finance that, although IMAX tickets sell at a premium, the company’s market share “has been going up” since the start of the pandemic.
IMAX captured a record 4.7% of the domestic box office in the first quarter, a sizable increase compared to the 4.4% market share it held for full year 2021 and the 3% share it maintained for first quarter 2019 (a record-breaking year for the company.)
“For quality, people will pay up,” the CEO stated, noting how consumers are still willing to spend on other forms of entertainment like concerts and sporting events despite the current inflationary environment.
“People just spent so much time sitting on their couch that, if they get something really special, like IMAX, they’re going to be happy to pay more for it.”
Rosenblatt Securities and B. Riley Financial recently reiterated their Buy ratings on the stock, setting respective price targets at $25 a share.
IMAX shares, although down roughly 10% year-to-date, are currently trading at about $17, suggesting potential upside of more than 45%.
Alexandra is a Senior Entertainment and Food Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com
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Read More:IMAX stock rises on revenue beat as ‘Maverick,’ ‘Dr. Strange’ boost theatrical return
2022-07-28 20:21:18
