IMAX Earnings Sink Due to Coronavirus Pandemic
IMAX Corporation was hit hard by coronavirus that cut its third quarter revenues in half and sent its earnings into negative territory.
Revenues at the exhibitor plunged 56.9% to $37.3 million, down from $86.4 million in the year-ago period. IMAX reported a loss of $47.2 million or 80 cents a share versus a profit of $9 million or 15 cents a share in the same quarter of 2019. Adjusted for one-time gains and costs, losses clocked in at 75 cents per share.
For the third quarter, IMAX beat consensus estimates for revenue, but its earnings missed the mark. The consensus earnings per share estimate was a 31 cent loss. Wall Street predicted revenues of $31.6 million for the company.
IMAX is unveiling its earnings in the midst of a pandemic that has decimated the exhibition industry and left studios hesitant to release the kind of big budget superhero movies that have dominated the box office in recent years. That’s bad news for IMAX, which has catered heavily to fanboy and fangirl consumers who are willing to shell out more money to watch Spider-Man or Wonder Woman save the world on the largest and clearest of screens.
IMAX has benefited, however, from the return of Asian audiences to movie theaters. Countries like China and South Korea have begun reopening as cases of COVID-19 have waned. IMAX has several venues in Asia and scored with the release of “The Eight Hundred” — the first Asian film shot entirely on IMAX cameras, as well as the recent Japanese hit “Demon Slayer.”
IMAX also isn’t as heavily leveraged as other exhibition chains such as AMC and Cineworld. Those theater chains are struggling under the weight of their debt-laden balance sheets, which have raised concerns among investors about their viability. In contrast, IMAX stressed that is has more than $305 million in cash on hand.
Shares of IMAX sank after the results were announced, falling 2.8% to $11.45 in pre-market trading.
More to come…
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