This past weekend was fertile soil for Imax (IMAX -1.77%) and the larger-than-life experiences that it blows up on the silver screen. Ant-Man and the Wasp: Quantumania -- the latest release from Walt Disney's (DIS -0.04%) Marvel hit factory -- hit the ground running. The movie generated an estimated $105.5 million in domestic ticket sales over the weekend, bumped to $120 million if you include Monday, the Presidents' Day weekend holiday.
The rest of the multiplex screens were relatively quiet. Every other film playing at theaters combined for just $37 million in domestic ticket sales. This isn't the kind of balance that exhibitors are hoping to achieve, but it works just fine for the Imax business model. It's only worried about what's playing on its supersized screen with enhanced audio and visuals, and that success in recent months has fallen squarely on Disney's broad shoulders.
Image source: Getty Images.
The big picture
Cinema has come a long way since the pandemic derailed studio release schedules and consumer appetites for a night at the movies. It's still nowhere close to where it was before. Ant-Man and the Wasp: Quantumania had a bigger premiere weekend than the franchise's two previous entries -- obviously an encouraging sign -- but total domestic box office receipts fell short of the tickets sold during the Presidents' Day holiday weekend in 2020, weeks before theater chains would temporarily shutter in response to the COVID-19 crisis.
Imax is faring better than the theater chains themselves. When it reports fresh financials later this week, Imax is expected to post a profit for both the fourth quarter as well as for all of 2022. The same can't be said for the publicly traded exhibitors. The industry itself is still struggling to generate positive net income. Disney is saving Imax, but rescuing the industry itself will be far more challenging. The key here is the Imax model.
Whether it's an outright purchase or a joint-venture arrangement, Imax's fortune is tied directly to the largest screen in the multiplex featuring its high-tech projection system. It needs a steady diet of blockbusters to generate ticket sales, particularly the action films that Disney has been so good at delivering over the years.
Disney has had the top draw for U.S. movie theaters in 13 of the past 15 weekends. The Marvel film Black Panther: Wakanda Forever reigned for five weeks before handing the baton to Avatar: The Way of Water to claim pole position for the next seven weeks. Then came a pair of forgettable weekends of weak debuts earlier this month before the third Ant-Man movie hit screens on Thursday night.
Only the biggest potential movies go through the process of being remastered and in some cases shot for Imax screenings. Disney has pretty much had a lock on your local Imax screen for more than three months. Imax is reporting this morning that its platform accounted for $24 million in global Ant-Man and the Wasp: Quantumania ticket sales, more than the first two entries combined.
Imax investors will find out this week just how much gratitude they owe the Mickey Mouse company. It will announce its fourth-quarter results shortly after Wednesday's market close. Analysts aren't holding out for much, despite the one-two punch of the Black Panther and Avatar sequels heading into the holidays. They see a profit of $0.21 a share -- down from $0.31 a share a year earlier -- on an 11% decline in revenue.
The declines shouldn't be a spirit breaker. The comparisons aren't kind. Domestic box office receipts for the industry declined 14% in the fourth quarter compared to the prior year. Spider-Man: No Way Home was a beast during the 2021 holiday season. And, yes, Spidey calls Disney home, too.
The key to the Imax report will be the cinematic experience enhancer's guidance. The current quarter is shaping up to be potent. Domestic ticket sales are 45% stronger year to date than where they were a year ago. Avatar: The Way of Water had a long tail of success, filling up seats through all of January and early February. The market that figured moviegoers would take a break in light of economic weakness late last year wasn't ready for the 2023 plot twist.
Imax continues to be a leader among movie theater stocks, and a profitable one now at that. One pressure point is that it has fallen short of analyst bottom-line targets in each of the last three quarters. If it can snap that unfortunate streak this week -- and deliver a rosy near-term outlook -- it could be a winner again. It better not forget to thank Disney in its acceptance speech.
