IMAX Corp (IMAX) Q1 Earnings Break Even, Revenues Miss Mark

IMAX Corporation (NYSE:IMAX) , based in Mississauga, Canada, reported mixed results in the first quarter of 2017. The company reported break-even earnings per share in the first quarter, which compared favorably to the Zacks Consensus Estimate of a loss of 1 cents. IMAX’s earnings per share in the first quarter of 2016 stood at 14 cents.

Total revenue in the first quarter of 2017 was $68.7 million, down 25.48% year over year. The figure also missed the Zacks Consensus Estimate of $71.1 million. Adjusted EBITDA margin in the reported quarter was 29.5%.

Category wise, equipment and product revenues were $11.5 million, down 51.4%. Services revenues totaled $38.8 million, down 12.26%. Rentals revenues totaled $15.8 million, down 27.19%, while Financial income was $2.4 million, up marginally.

Segmental Results

IMAX Theater Business generated revenues of $23.2 million down 33.8% year over year. Within this segment, IMAX system sales and sales-type leases were $6.9 million, down 61.43%. Ongoing fees and finance income was $2.5 million, down 3.4%. Meanwhile, Joint revenue sharing arrangements-fixed fees was $0.5 million, down 77.3%. Theater system maintenance was $11 million, up 12.41%, while Other Theatre revenues fell 13% to $2.2 million.

Network Business generated revenues of $39.3 million, down 24.8% year over year. Within this segment, IMAX DMR was $23.4 million, down 21.5%. Joint revenue sharing arrangements-contingent rent was $15.2 million, reflecting a decline of 28.5% and IMAX systems-contingent rent deteriorated 42% to $0.7 million.

Other segments generated revenues of $4.8 million, down 1.62% year over year. Within this segment, Film distribution and post-production was $3.6 million, up 29.4%, and Other revenues were down 37% to $1.2 million. IMAX exited the first quarter with cash and cash equivalents of $190.5 million, compared with $204.7 million at the end of 2016.

Network Growth Statistics

The company installed 15 theaters (including 1 upgrade) as against 19 (including 9 upgrades) in the first quarter of 2016. The company signed 39 theatre agreements in the first quarter of 2017 compared with 36 in the year-earlier quarter. As of Mar 31, 2017, total theater count in backlog was 524 compared with 388 as of Mar 31, 2016.

Zacks Rank & Key Picks

IMAX currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the broader consumer discretionary sector are AMC Entertainment Holdings (NYSE:AMC) , Acme United Corporation (NYSE:ACU) and Adidas (DE:ADSGN) AG (OTC:ADDYY) . AMC Entertainment and Adidas sport a Zacks Rank #1 (Strong Buy), while Acme United carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of AMC Entertainment and Acme United gained over 2% and 6%, respectively, over the last one month, while Adidas shares gained above 17% over a period of three months.

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