Blockbusters like Disney’s “Rogue One: A Star Wars Story” helped IMAX to a big fourth quarter, as the company reported earnings that topped expectations.
After markets closed Thursday, the ultra-large screen manufacturer reported revenue of $106.9 million and earnings of 22 cents a share. That fell short of the company’s fourth quarter last year, when mega-hits like “Star Wars: The Force Awakens” powered IMAX to $119.3 million in revenue and earnings of 39 cents a share. IMAX did, however, top analyst expectations, which were $99.6 million in revenue and earnings of 21 cents a share on average.
“2016 was an impressive year for IMAX on several strategic fronts: our footprint grew 15 percent, we signed a record 319 new theatre agreements, and we further established IMAX as a leader in the entertainment industry through two key growth initiatives — original content and virtual reality,” IMAX CEO Richard L. Gelfond said in a statement. “We’re extremely optimistic on the theatrical side of the business, where demand for IMAX has hit record levels. With a global footprint of 1,215 theatres in 75 countries and a promising blockbuster-driven 2017 film slate that features more IMAX differentiation than any year in our history, we believe we’re extremely well positioned for future growth.”
On Wednesday, IMAX announced that it has extended its relationship with Disney with a new multi-picture deal that will begin this year and continue through 2019, and include tentpoles like the forthcoming untitled “Indiana Jones” and Han Solo films.
IMAX is heavily reliant on spectacle-heavy blockbusters and the Chinese box office, both of which slowed down last year. The U.S. box office was down 5 percent in the fourth quarter of 2016 compared with the previous year, and the Chinese box office was up just 3 percent after years of double-digit growth — and actually down in dollar terms, due to the weakening of China’s yuan.
The company’s biggest client is Dalian Wanda Group, the parent of AMC Theatres and also China’s (and the world’s) largest theater chain. In August, IMAX and Wanda agreed to add 150 theaters in China, bringing the total up to 360 IMAX screens by 2020.
IMAX has also stepped up its pursuit of non-theatrical revenue, recently expanding its footprint in virtual reality with the opening of its first VR arcade in Los Angeles, which allows paying customers without the ability or desire to splash several hundred dollars on high-end VR equipment to try out the technology.