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Why Is Imax (IMAX) Up 9.7% Since Last Earnings Report?
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A month has gone by since the last earnings report for Imax (IMAX - Free Report) . Shares have added about 9.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Imax due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Recent Earnings
IMAX 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -59.62% due to these changes.
VGM Scores
Currently, Imax has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable soley for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Imax has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Imax (IMAX) Up 9.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Imax (IMAX - Free Report) . Shares have added about 9.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Imax due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Recent Earnings
IMAX 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -59.62% due to these changes.
VGM Scores
Currently, Imax has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable soley for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Imax has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.