Ahead of the Bell: Analyst

An analyst at Merriman Curhan Ford upgraded shares of Regal Entertainment Group and raised estimates for Imax Corp. and Carmike Cinemas Inc. Monday after the Paramount Pictures film "Transformers: Revenge of the Fallen" took the top spot at the box office during its opening weekend.

In a client note, Eric Wold raised his rating for Regal _ which operates the largest chain of movie theaters in the country _ to "Buy" from "Neutral." The change comes a few weeks after Wold downgraded the stock due to worries about second-quarter box office growth compared with consensus expectations.

However, in the first five days of its release, the second "Transformers" film generated $201 million in domestic ticket sales. He noted that this is the highest total any film has had in the first five days of release.

Due to the movie's performance, he now feels "less cautious" about the quarter's ticket sales.

The analyst raised his estimates for Regal, saying he now expects second-quarter earnings of 23 cents per share on $738.9 million in revenue, up from 22 cents per share on $732.1 million previously. Analysts polled by Thomson Reuters expect, on average, a profit of 24 cents per share on $743.4 million in revenue.

In a separate note, Wold reiterated his "Buy" rating and increased his second-quarter estimates for Imax, pointing out that the "Transformers" movie generated an estimated $18.3 million in its first five days of playing on the company's large screens. Imax had said on Sunday that the movie showed "exceptionally strong opening results."

Wold had expected Imax's second-quarter box office results to total $59 million, but said with the success of "Transformers" he now expects $75 million in the quarter. He added this estimate might still be conservative by $4 million or $5 million.

"In addition, the movie could help drive upside to 3Q box office expectations," he said.

The analyst now thinks Imax will report second-quarter earnings of 4 cents per share on $38.2 million in revenue, compared with an earlier estimate of a penny per share on $35.7 million.

Analysts are looking for a loss of a penny per share on $35.7 million in revenue.

Wold also raised estimates for Carmike Cinemas in another client note, predicting the movie theater chain's second-quarter results will be helped by revenue from the 3-D movies "Monsters vs. Aliens" and "Up."

He also thinks that its strategy of operating theaters in smaller markets helps it benefit from high-demand movies like the new "Transformers" film, since in those areas "consumers are forced to go to Carmike theaters or miss the movie altogether."

Wold, who reiterated his "Buy" rating, raised his second-quarter earnings-per-share estimate by four cents to 22 cents per share. Analysts expect earnings of 20 cents per share.