IMAX Gets Downgrade After Monster Q4 Earnings

Michael Teague  |

Despite reporting robust fourth quarter numbers this week and seeing its stock price hit a new 52-week high, the increasingly ubiquitous movie theatre network IMAX Corp. (IMAX) was downgraded by Stifel Nicolaus from buy to hold on Friday, sending shares moderately lower.

The company earned $12.9 million, $0.19 per-share, in Q4 of 2012, compared to $6.3 million, $0.9 per share, in Q4 of 2011.  The doubling is a result of a 56 percent increase in box office revenue from its theatres, or $77.8 million, while analyst predictions were set at $75 million.

With 730 theatres in 53 countries, Imax installed 46 theatres domestically in Q4 of 2012, down from 57 the year previous.  However the company is currently backlogged on orders for its projection systems, to the tune of 276.  In a conference call on Thursday, CEO Richard Gelfand cited the majority of the Imax’s growth opportunities coming from international markets, including significant inroads into Brazil and India

Q4 saw the company sign 38 new contracts for theatres, up 12 contracts from the previous year.  Imax also makes a good deal of money from movies that are filmed with its high-resolution technology (Tom Cruise’s “Oblivion”), as well as the conversion of existing films to their projection format.

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