Despite ‘Avatar 2’ Box Office Success, Imax’s Quarterly Revenues Fall
Sometimes it takes more than a pair of global blockbusters to shake off the lingering impact of a devastating public health crisis.
Quarterly sales and profits fell at Imax despite the commercial success of “Avatar: The Way of Water” and “Black Panther: Wakanda Forever.” The big screen company recorded revenues of $98 million, a 10% drop from the $108.6 million that Imax recorded in the year-ago period. The company also recorded profits of $2.6 million, compared to the $10.1 million that Imax logged in the year-ago period. That came out to earnings of 19 cents a share, which failed to match the profits of the 31 cents that Imax recorded in the same period in 2021.
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Still, shares of the company climbed more than 2% in after-hours trading on the better-than-expected results. Analysts had expected earnings of 19 cents per share and revenues of $95.7 million.
Imax also sounded a hopeful note, saying it “fully expects to resume pre-pandemic levels of performance in 2023.” That’s welcome news considering the fierce headwinds that the cinema business has battled since COVID closed theaters and upended cultural life. To that end, Imax noted that its global box office improved 33% in 2022, finishing at $850 million. For comparison, Imax’s total box office in 2019, the last pre-pandemic year, topped out at just over $1 billion.
Imax predicted that its financial picture will improve thanks to a combination of broadly appealing movies, such as last weekend’s “Ant-Man and the Wasp: Quantumania,” as well as the reopening of China, a major market that has shrunk due to COVID closures. But in his remarks to investors following the earnings report, Imax CEO Richard Gelfond noted that the situation in China has improved dramatically. He emphasized that in the first two months of 2023, the country has already fielded local-language hits such as “The Wandering Earth 2” and “Full River Red,” as well as contributed robust ticket sales for Hollywood fare such as “Avatar: The Way of the Water.”
“The speed with which the Chinese box office has recovered has been stunning,” Gelfond said. “In January, the Chinese box office more than doubled the North American box office.”
The Imax chief said that in the coming months, major films such as “Indiana Jones and the Dial of Destiny” and “Mission: Impossible – Dead Reckoning Part 1” will keep the box office humming. He also predicted that these movies will attract crowds even though many analysts are predicting that there may be a recession.
“We know that our box office has historically thrived in economic downturns,” Gelfond said. “So, our optimism for the year ahead is well founded and our credibility is well earned.”
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