Shares of Imax surged after the company announced that challenges from last year’s Hollywood strike and the pandemic are now behind it. The stock jumped 8% to $19.25 on Thursday, marking a significant rebound for the company. Year-to-date, Imax shares have risen more than 28%, reflecting growing investor confidence in the company’s future prospects amid a recovering entertainment industry.
Imax, headquartered in New York, specializes in cinema technology, known for its high-resolution cameras, film formats, projectors, and theaters. Despite a second-quarter profit of $3.6 million—less than half of its $8.4 million profit from the same period last year—earnings per share were 7 cents, surpassing analysts’ expectations of 2 cents per share, according to FactSet. This indicates that while profits have decreased, the company is still performing better than expected in terms of earnings.
Revenue for the second quarter fell by 9% to $89 million, yet it exceeded the $74.5 million anticipated by analysts polled by FactSet. This revenue beat suggests that Imax’s core business operations are resilient, even as they face external challenges.
CEO Richard Gelfond highlighted that last year’s Hollywood strikes were a temporary setback for the entertainment industry, impacting Imax’s slower second-quarter performance. However, he emphasized that the company is now “on a tear,” with a robust lineup of films set for release through 2025 and 2026. Gelfond’s optimism is bolstered by a favorable movie slate that includes blockbuster releases expected to drive audience turnout and revenue.
In addition to a strong lineup of films, Imax is poised to benefit from an expansion in its number of movie screens. The company installed 39 systems in the recent quarter, up from 29 during the same quarter last year. For the full year, Imax has raised its forecast for installations to between 130 and 150 new or upgraded systems, compared to 128 installations in 2023. This increase in installations indicates a strategic effort to broaden its global footprint and capitalize on the growing demand for immersive movie experiences.
The combination of a promising film slate, strategic expansions, and the easing of industry headwinds positions Imax favorably in the eyes of investors. With its stock already experiencing significant gains this year, Imax is well-positioned to continue its upward trajectory as it leverages its technological innovations and expanded market presence to capture a larger share of the entertainment industry.
