Imax (IMAX) investors take note: Merriman, Curhan Ford analyst Eric Wold this morning said he’s concerned Q3 EPS may miss the mark based on box office trends, and the battle for the bigger and bigger screen is getting more intense.
With Q3 box office receipts so far of $85 million for the quarter, Wold says there’s risk Imax won’t make his Q3 receipts estimate of $97 million, and might therefore miss his estimate for $45 million in revenue and 7 cents in profit per share, which is below the Street’s $49.7 million and 12 cents average estimate.
On the upside, the company signed a deal with Odeon to install four more theaters in the U.K. preceding the release of the next Harry Potter film in mid-November. That will boost Q4 revenue, writes Wold. (He raised his Q4 revenue estimate to $59.9 million from $57 million.
But going forward, Imax will compete with more and more large-format screens of various types, making the competitive environment more tough. Some of those other options may offer consumers lower prices, which may drain Imax’s box office receipts. How that plays out, and the vagueries of the coming movie slate, offer a lot of “wildcards” for Imax, none of which look good, he believes.
What are those other large-format systems, you ask? Wold doesn’t say, rather asserts, “With each of the top exhibitors ramping the installation of proprietary large-format theaters along with the ramp in DCIP-fueled 3D screens…”
Imax shares today are up a penny at $14.47.
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