IMAX’s second quarter is not going to get rave reviews on Wall Street, as the giant screen company fell victim to a slate of spring and summer blockbusters that largely failed to deliver.
For the three months ended June 30, IMAX reported $87.8 million in revenue and a net loss of 3 cents a share. That compares with the $91.7 million in revenue and earnings of 18 cents a share IMAX hauled in during the corresponding period last year. Analysts had expected IMAX to report revenue of $89.3 million and earnings of 14 cents a share, on average.
After a tough first quarter, in which the type of big-budget blockbusters that are key to IMAX’s success largely disappointed, the company was hoping to bounce back behind films like “The Fate of the Furious,” “Guardians of the Galaxy Vol. 2,” “Wonder Woman” and “Beauty and the Beast” — which was released at the tail end of the first quarter. However, other would-be blockbusters that flopped, like “The Mummy,” helped put the company in the red for the quarter. The domestic box office as a whole was down 3.6 percent compared with last year for the three months ended June 30.
“We continue to take a portfolio approach to our film business, understanding certain films resonate strongly with consumers and others less so,” IMAX CEO Richard Gelfond said in a statement accompanying the earnings. “While several films in the second quarter underperformed our expectations, the recent release of Christopher Nolan’s ‘Dunkirk’ emphasizes the value in viewing our business as a portfolio of films. ‘Dunkirk,’ which was shot almost entirely with IMAX film cameras, achieved $12 million domestically and indexed a record 23 percent in IMAX, opening weekend. Breakout titles like this are encouraging as they tend to provide strategic benefits lasting well beyond the window of the film. Historically, with other IMAX hits, we have seen increased consumer awareness of IMAX, heightened demand from other filmmakers looking to leverage our format and greater demand from exhibitors, among other benefits.”
The company’s stock remains down 30 percent year-to-date. Last month, IMAX announced that it will lay off about 100 employees — 14 percent of its work force — in a move the company expects will save about $200 million in annualized costs.
IMAX has taken steps to diversify its revenue sources from feature films, as it will debut ABC’s new comic-book series, Marvel’s “Inhumans,” on its large format screens before the show hits broadcast television.
The company has also jumped into virtual reality with both feet, opening a handful of VR arcades with more to come. TheWrap visited an IMAX VR center in Los Angeles, which was very impressive — but is still working out some kinks. Investors will assuredly want an update on the state of IMAX’s virtual reality ambitions.
IMAX will hold a conference call at 4:30 p.m. ET.