The actors strike and a series of holiday blockbusters that didn’t shine as brightly took a bite out of Imax‘s fourth-quarter earnings. Revenues at the exhibition and technology company fell to $86 million, a 12% drop from the $98 million that the company reported in the prior-year quarter. Profits, however, were essentially flat, with Imax reporting net income of $2.5 million, a 3% decline from the $2.6 million in the prior-year quarter. Imax’s adjusted earnings per share of 17 cents represented an 11% drop.
Imax’s revenues missed Wall Street’s estimates of $89.6 million, while its profits topped projections of 10 cents per share.
Heading into the Christmastime frame, Imax faced tough comparisons with the close of 2022 when “Avatar: The Way of Water” dominated the box office. James Cameron’s ambitious sequel inspired moviegoers to check out Pandora on the widest screens available, which was good news for Imax as the company has become synonymous with the fanboy and fangirl fare. Instead, Imax was saddled with the underperforming “Aquaman and the Lost Kingdom,” the final installment in the floundering and now-defunct DC Extended Universe. It had much better luck with “Taylor Swift: The Eras Tour” and “Wonka,” both of which scored at the box office earlier in the fall and winter, helping to lift Imax revenues.
Looking ahead, Imax is gearing up for the release of “Dune: Part Two” this weekend. The sci-fi epic has enjoyed strong reviews and is expected to dominate the box office. “Dune: Part Two” was originally slated to hit theaters last fall, but Warner Bros. and Legendary, the studios behind the film, opted to delay it because Timothée Chalamet,Zendaya and the rest of the starry ensemble couldn’t cross picket lines to promote the movie. That deprived Imax of another big tentpole movie to close out 2023 even as it promises to lift its earnings this year.
Imax CEO Richard Gelfond said the company had repurchased more than $40 million in the company’s stock since October 2023. The move, he told analysts on a call shortly after earnings were announced, was made because he believed that the market was undervaluing Imax. (Shares are currently trading at just over $15, down from the roughly $20 per share that Imax was trading at in the summer).
“While we never like seeing our stock go down, this has created an opportunity for us to buy back more shares,” he said.
Gelfond acknowledged the strike’s impact, but said that “our global technology platform and asset-lite model remain remarkably resilient.”
In its earnings report, Imax also disclosed full-year figures, which saw revenue increase 25% to $375 million, as adjusted earnings per share hit 94 cents — up from 6 cents in 2022. The company’s net income of $25 million also improved dramatically from a loss of $23 million in 2022. Imax installed 128 new systems in 2023, an improvement on the 92 it installed in the prior year. Many of those new installations happened in Japan and South Korea, two important markets for Imax.
Shares of Imax were up more than 3% in after-hours trading.
