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IMAX Outpaces Earnings Estimates in Q2, Misses Revenues
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IMAX Corporation (IMAX - Free Report) reported second-quarter 2018 earnings of 30 cents per share that beat the Zacks Consensus Estimate by a nickel and soared 200% year over year.
Revenues of $98.3 million increased 12.1% year over year but missed the Zacks Consensus Estimate by $1 million.
Category-wise, Equipment and product sales were $15.4 million, down 28% from the year-ago quarter. Services revenues totaled $55 million, up 23% year over year. Rentals totaled $25 million, up 29.3%. Finance income increased 28.7% year over year to $3 million.
Segment Details
IMAX network business revenues were $60.9 million, up 28.3% year over year.
Within the segment, IMAX DMR revenues increased 30.3% year over year to $36.2 million.
Gross box office from IMAX DMR films climbed 27.4% year over year to $342.6 million in the reported quarter, aided primarily by the exhibition of 14 films (10 new and four carryovers), compared with 16 films (11 new and five carryovers) exhibited in the year-ago quarter.
IMAX Corporation Price, Consensus and EPS Surprise
Joint revenue sharing arrangements-contingent rent was $24.7 million, reflecting an increase of 31% from the year-ago quarter.
IMAX theater business generated revenues of $30.9 million, down 5.7% year over year due to low sale-type theater installations.
Within this segment, Theater system maintenance revenues were $12.3 million, up 13.1% from the year-ago quarter. Other theater revenues were $2.3 million, up 32.7%. However, IMAX systems revenues plunged 16.8% year over year to $15.3 million.
New business revenues surged 137.7% year over year to $3.1 million. Other revenues however plunged 44.6% to $3.5 million.
Network Growth Statistics
IMAX installed 31 theater systems, of which 30 were for new theater locations. As of Jun 30, 2018, total IMAX theater network consisted of 1,410 systems, of which 1,314 were in commercial multiplexes.
There were 635 theaters in backlog as of Jun 30, 2018, compared with the 580 in backlog as of Jun 30, 2017.
IMAX signed contracts for 40 new theaters and 98 upgrades in second-quarter 2018.
Operating Details
In the reported quarter, gross margin expanded 500 basis points (bps) on a year-over-year basis to 61.4%.
Network gross margin expanded 420 bps on a year-over-year basis on the back of $343 million generated at IMAX box office.
IMAX DMR gross margin expanded 590 bps and gross margin for joint revenue-sharing arrangements expanded 300 bps from the year-ago quarter.
Operating expenses increased 8% year over year to $30.3 million. Selling, general & administrative (SG&A) expense increased 0.58% year over year. Research & development (R&D) expense decreased 2.5% from the year-ago quarter.
Balance Sheet
As of Jun 30, 2018, IMAX had cash and cash equivalents of $133 million compared with $145.6 million as of Mar 31, 2018.
During the quarter, IMAX repurchased shares worth $33 million at an average price of $22.01 per share.
Guidance
For third-quarter 2018, IMAX expects to install 40 new theater systems.
For 2018, management anticipates total operating expenses to be essentially flat compared with 2017. The company expects DMR expense to be in the range of $38-$40 million.
Both AMC and Activision are set to report on Aug 2, while Weight Watchers is scheduled to report on Aug 6.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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IMAX Outpaces Earnings Estimates in Q2, Misses Revenues
IMAX Corporation (IMAX - Free Report) reported second-quarter 2018 earnings of 30 cents per share that beat the Zacks Consensus Estimate by a nickel and soared 200% year over year.
Revenues of $98.3 million increased 12.1% year over year but missed the Zacks Consensus Estimate by $1 million.
Category-wise, Equipment and product sales were $15.4 million, down 28% from the year-ago quarter. Services revenues totaled $55 million, up 23% year over year. Rentals totaled $25 million, up 29.3%. Finance income increased 28.7% year over year to $3 million.
Segment Details
IMAX network business revenues were $60.9 million, up 28.3% year over year.
Within the segment, IMAX DMR revenues increased 30.3% year over year to $36.2 million.
Gross box office from IMAX DMR films climbed 27.4% year over year to $342.6 million in the reported quarter, aided primarily by the exhibition of 14 films (10 new and four carryovers), compared with 16 films (11 new and five carryovers) exhibited in the year-ago quarter.
IMAX Corporation Price, Consensus and EPS Surprise
IMAX Corporation Price, Consensus and EPS Surprise | IMAX Corporation Quote
Joint revenue sharing arrangements-contingent rent was $24.7 million, reflecting an increase of 31% from the year-ago quarter.
IMAX theater business generated revenues of $30.9 million, down 5.7% year over year due to low sale-type theater installations.
Within this segment, Theater system maintenance revenues were $12.3 million, up 13.1% from the year-ago quarter. Other theater revenues were $2.3 million, up 32.7%. However, IMAX systems revenues plunged 16.8% year over year to $15.3 million.
New business revenues surged 137.7% year over year to $3.1 million. Other revenues however plunged 44.6% to $3.5 million.
Network Growth Statistics
IMAX installed 31 theater systems, of which 30 were for new theater locations. As of Jun 30, 2018, total IMAX theater network consisted of 1,410 systems, of which 1,314 were in commercial multiplexes.
There were 635 theaters in backlog as of Jun 30, 2018, compared with the 580 in backlog as of Jun 30, 2017.
IMAX signed contracts for 40 new theaters and 98 upgrades in second-quarter 2018.
Operating Details
In the reported quarter, gross margin expanded 500 basis points (bps) on a year-over-year basis to 61.4%.
Network gross margin expanded 420 bps on a year-over-year basis on the back of $343 million generated at IMAX box office.
IMAX DMR gross margin expanded 590 bps and gross margin for joint revenue-sharing arrangements expanded 300 bps from the year-ago quarter.
Operating expenses increased 8% year over year to $30.3 million. Selling, general & administrative (SG&A) expense increased 0.58% year over year. Research & development (R&D) expense decreased 2.5% from the year-ago quarter.
Balance Sheet
As of Jun 30, 2018, IMAX had cash and cash equivalents of $133 million compared with $145.6 million as of Mar 31, 2018.
During the quarter, IMAX repurchased shares worth $33 million at an average price of $22.01 per share.
Guidance
For third-quarter 2018, IMAX expects to install 40 new theater systems.
For 2018, management anticipates total operating expenses to be essentially flat compared with 2017. The company expects DMR expense to be in the range of $38-$40 million.
Zacks Rank & Stocks to Consider
IMAX currently carries a Zacks Rank #3 (Hold).
AMC Networks (AMCX - Free Report) , Activision and Weight Watchers International (WTW - Free Report) are stocks worth considering in the broader consumer discretionary sector. All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Both AMC and Activision are set to report on Aug 2, while Weight Watchers is scheduled to report on Aug 6.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>