Imax, the renowned exhibition and technology company, faced a downturn in its fourth-quarter earnings, influenced by factors such as an actors’ strike and a series of holiday blockbusters that failed to replicate the success of past hits. Revenues for the quarter fell to $86 million, marking a 12% decrease from the $98 million reported in the same period the previous year. Despite this, profits remained relatively steady, with Imax reporting a net income of $2.5 million, representing a slight 3% decline from the prior-year quarter. Imax’s adjusted earnings per share of 17 cents reflected an 11% drop.
The company’s revenues fell short of Wall Street’s expectations, which had projected $89.6 million, although its profits exceeded the estimated 10 cents per share.
Heading into the holiday season, Imax faced challenging comparisons with the blockbuster success of “Avatar: The Way of Water” in 2022. Instead of a similar megahit, Imax featured films like “Aquaman and the Lost Kingdom,” which underperformed, alongside successful releases such as “Taylor Swift: The Eras Tour” and “Wonka,” contributing to its overall revenue.
Looking ahead, Imax anticipates a boost with the release of “Dune: Part Two” this weekend. The highly anticipated sci-fi sequel, with strong reviews, is expected to dominate the box office. Originally scheduled for release in the fall of the previous year, the delay of “Dune: Part Two” due to circumstances including the actors’ strike affected Imax’s earnings for 2023.
Imax CEO Richard Gelfond highlighted the company’s decision to repurchase over $40 million in stock since October 2023, citing the market’s undervaluation of Imax as a motivating factor. Despite challenges, Gelfond emphasized the resilience of Imax’s global technology platform and asset-lite model.
In its earnings report, Imax revealed full-year figures, showing a notable 25% increase in revenue to $375 million, with adjusted earnings per share rising to 94 cents from 6 cents in 2022. Net income also saw significant improvement, reaching $25 million compared to a loss of $23 million in the previous year. Imax expanded its footprint with the installation of 128 new systems in 2023, particularly in key markets like Japan and South Korea.
Following the earnings announcement, Imax’s stock experienced a modest uptick of over 3% in after-hours trading.
